2025 CLO Market: A Promising Outlook

Laura Coady, the head of the global CLO division at Jefferies International, has an optimistic view of the upcoming year for Collateralized Loan Obligations (CLOs).

Interest Rate Trends in Europe Foster Growth

Coady points out that the current trajectory of interest rate reductions across Europe is conducive to mergers and acquisitions. This trend is expected to spur further activity in the CLO market.

Mergers and Acquisitions: An Influential Factor

Reflecting on the past year, mergers and acquisitions have significantly influenced overall issuance, with a notable rise by approximately 30%. Coady explains this has been an atypical surge compared to the historical average.

Looking Ahead: A Return to Stability

For the upcoming year, a return to more stable levels is anticipated, targeting a 50% impact from mergers and acquisitions. According to Coady, achieving this balance is key to a remarkable year for CLOs in 2025.

This insight was shared during an interview broadcasted by Bloomberg Television on November 14.