A look back at the breakfast meeting on June 4th at the CLO

📌 For or against? CLOs at the dawn of the Solvency II reform

Many thanks to our speakers:

🔹 Frédéric Couderc , Co-founder and Co-CIO of the Chenavari group

🔹 Nadège Picharles , Business Development, Marketing & Communication, Chenavari AM

🔹 David Muresianu , Director of Real Assets, AFG

The breakfast organized by Khiplace helped dispel persistent misconceptions about securitization. Supported by solid fundamentals, unprecedented transparency, and a very favorable risk/return profile on senior tranches, European CLOs are poised to reach a new milestone. The 2027 horizon and the anticipated implementation of Solvency II could finally remove the prudential constraints, unleashing a decisive institutional firepower for financing the European economy.

Key takeaways include:

➡️ The Solvency II reform could help improve the prudential treatment of certain securitisations and restore depth to the European CLOs market.

➡️ Regulatory discussions remain open, however, with several points of attention regarding capital calibration, transparency and readability of risks for insurance investors.

➡️ Since the 2008 financial crisis, the CLO market has evolved profoundly: improved structures, strengthened protections, better quality of underlying assets and demonstrated resilience over several market cycles.

➡️ Faced with the rise of AAA CLO ETFs, active management retains, according to stakeholders, a real added value, particularly in credit analysis, the selection of structures and the relative management of the capital structure.

➡️ Finally, beyond regulatory issues, several opportunities were mentioned in certain tranches of CLOs, in an environment marked by still attractive spreads and fundamentals considered generally solid.

Thank you to all participants for the quality of the discussions.