SPEAKER_02 0:07

Welcome to another Fine Matters Global Capital Securitization Podcast. I'm Sarah Ainsworth, and this week I'm joined by both Tom Hall and Thomas Hopkins. Well, this week it's been a proper September. We've been very busy in the ABS market. It's had one of the busiest fortnights of the year. Tom is going to talk to us about that and whether there's going to be any repricing at all or a pause in the market. And a little bit later we'll turn to CLOs, where managers who've been starved of leveraged loans for many years are now expecting a bit of a rush of supply. So Thomas has been looking at that and whether that will finally fix this CLO arbitrage or not. But first, hello, uh Tom and Thomas. Good to have all three of us back together again.

SPEAKER_01 0:53

Yeah, great to be back. And it has been an incredibly busy uh start to the month. I think this is your first week back after your holiday, Thomas. How's it been for you?

SPEAKER_00 1:03

Uh incredibly busy, Tom. I've uh already forgotten that I ever was on holiday. Um, but it's uh it's good to see such strong activity in the market. And it's it's pleasant to be uh recording this podcast uh the first time with a sort of the the new trio, the new era. So, you know, uh very pleased to be here to to discuss all things CLOs.

SPEAKER_02 1:22

Yeah, they tried to get another Tom or Thomas but couldn't.

SPEAKER_00 1:26

So yes. I have no idea how we would differentiate between each other if we had to do it.

SPEAKER_02 1:31

Tommy or Tomo, I'd be yeah. But yeah, we we like you say we've been really busy and not just the markets, we had our Juicy live this week, and that was fun on the uh ABS data centers. So, Tom, you were speaking there. Did you enjoy that? It was it was good fun, wasn't it? Lots of good turnout.

SPEAKER_01 1:47

Yeah, I really enjoyed it. And yeah, as you say, it was a really great turnout, and there were uh loads of investors there as well, which is always great to see, especially when you're you know, because that's one of the big questions sort of around uh data centers that how do we bring in uh more investors? And so there's you know, there's clearly interest in the asset class. It's just about you know managing to convert that interest from uh attending conferences to to buying the bonds. But uh hopefully, yeah, it looks like there's plenty of potential for that though.

SPEAKER_02 2:16

For sure. There were good vibes and people were positive. I mean, I I think as the bunkers you would expect them to be. But um, yeah, I think that the consensus was at the end that it will, you know, in five years' time, it will have gone from niche to very much mainstream, and um, yeah, so uh definitely it's a good market that we're all in securitization. But the future is um more growth for sure. So that that was fun, and then straight that was on Thursday morning, and then from there, um, all three of us actually were at the 24 asset management conference. Again, really interesting, and um even some well, kind of would you call Lord Hagar celebrity?

SPEAKER_00 2:56

I think that's a quite a borderline case when it comes to celebrities.

SPEAKER_02 3:00

He wouldn't do big brother, would he, or anything?

SPEAKER_01 3:02

But um if you're like a politics nerd like me, then he he's celebrity spaces, so yeah, yeah.

SPEAKER_02 3:08

But I actually missed his speech, but um I heard he was he was very good, he was eloquent, and although he didn't get into the nitty-gritty of um abs markets, did he? But apparently he was he was very good. Did you did you both enjoy it?

SPEAKER_01 3:21

Yeah, it was great. And there was definitely uh, you know, uh outside of uh obviously William Haig, there there was also plenty of ABS stuff. And I I think they said it it might have been in terms of they had three breakouts, and I think they said ABS was actually the uh busiest one this year.

SPEAKER_00 3:36

So uh definitely uh really strong uh and I think that there was a big there was a big sort of plenary session on CLOs completely focused on sort of opportunities and uh there's quite a lot of discussion of software and sort of differentiation between different software names uh at one point and sort of how uh managers are kind of thinking about that. And obviously, software has been uh a big part of you know, sort of software leverage loans have been a big part of what CLO managers have been thinking about this year in terms of the the risk to those borrowers' business models coming from AI. So that was certainly discussed on on the panel. But yeah, so very strong participation actually was a rather it was kind of packed sort of plenary area for people listening into CLOs. And I think part of the point was to try to sort of communicate with a couple of you know some market participants who maybe are slightly less familiar with CLOs and sort of uh you know, um and introduce them to them. So yeah, it was definitely an interesting panel.

SPEAKER_02 4:29

Yeah, we were all there and we we enjoyed it very much. Thank you to um 24 for the invite. Uh we hope to be at the next one, and it's great to see lots of people in the market as well. But yeah, so maybe we'll if we look at what global capital have been writing about this week. Tom, talk to you first, maybe. Um, do you want to kick off and tell us what what you were writing about for your main well? You've obviously had quite a few deals to write up as well as your main cover story that you focused on this week.

SPEAKER_01 4:55

Yeah, so it's been another really packed week, and I I kind of mentioned that. I mean, that's sort of uh what my week story has been on. It's just how uh packed the market is. I mean, we're recording this on the Friday. I think we've had seven deals pricing this week, maybe eight, depending on uh how the last one goes. But I mean, that's on top of the eight that priced last week, which is you know pretty packed. I mean that you know that's often the case in September, but you know, from speaking to people, it it does feel uh, you know, incredibly busy, uh, which is you know really good. And all pretty much all the deals are you know getting really strong order books, and uh it sounds like you know, in investor engagement has been pretty strong. Uh uh so there's you know, I think it's uh a really good start for the market. But I think that there's also, you know, there are some signs of I I don't even necessarily want to say trouble, but I mean definitely a change in terms of where deals are pricing at.

SPEAKER_02 5:54

Yeah. It seemed like you you were talking a bit about testing the levels and it do you get like a sense? I mean, is that right? And it do you get a sense that in vet some investors are maybe refusing to go beyond certain levels and uh has it hit a floor or is it more like a some hangover? Um, how how would you characterize it all?

SPEAKER_01 6:14

I mean it's always tough to tell in the even though the market has been sort of reopened for you know about three weeks. I think you uh there is a case of sometimes you do still need just a few more deals to really, you know, confirm exactly where the market's at. But it does feel like I mean it it sort of depends on each market. But I mean the you know the the UK uh RMBS market, I think is one where there has sort of been a repricing in that market. Um, but that kind of started in July. So, you know, what's happened is I suppose that that repricing sort of just continued when the market picked back up. So we picked back up uh at those July levels for uh you know UK prime RMBS. Like um, you know, we had Newcastle last week priced a deal at 55 basis points, that's exactly the same as the 55 basis points that uh Lloyd's and Coventry priced their deals at in July. And you know, I think I use a quote in the story, but uh essentially someone was saying to me, you know, if three deals in a row are pricing at 55, that's an investor's way of telling you that 55 is is basically as as tight as uh willing to go. This week we had West Bromwich Building Society uh priced a deal at 57, and um I think that that two base point premium is probably most likely down to uh West Brom's just a little bit uh less of a regular issuer um compared to those other three. So I think that's another deal that's sort of in about uh the same area. And you know, I I think from speaking to investors, that's one asset class where they've kind of been saying, you know, uh a repricing was long overdue. And if you look at where, you know, UK Prime is at compared to I mean, obviously a lot of these investors are they're gonna be looking at GILTs and covered bonds. So there's that sort of relative value question of whether uh you can justify buying prime at like in the high 40s. But even if you're just looking at other products in the ABS market, you know, UK buy to let now there's plenty of deals that are getting uh SDS labels that you know bank treasuries can can really start looking at investing in. And if those deals are pricing in the you know mid to low 80s, you've really got to say, okay, is is Prime worth it at uh at these you know ultra tights of the the high 40s? And they they've clearly kind of said no, it needs to be more in the the mid-50s to uh you know make that sort of relative value sort of calculation work. So I I think it is you know quite interesting in in terms of the repricing, but again, it it doesn't look like the the market's you know super you know struggling in any way.

SPEAKER_02 8:48

It just looks like that's the repricing in sterling, is that?

SPEAKER_01 8:51

Yeah, yeah, yeah, exactly.

SPEAKER_02 8:53

Yeah, okay, cool.

SPEAKER_01 8:54

You know, there's different questions around exactly where the repricing is. Is it just seniors or is it down the mes? And then there's also the question of is this just Stirling or is it Europe as well?

SPEAKER_02 9:05

Okay, and you just you mentioned the MES there. Um, and I think you pointed out that the MES has hasn't really repriced much when compared to seniors. Who actually loses there, if you like? Um, and do people care or not if they've got say deposits or covered bonds? And um is it just like the Primar RMBS issuers who were who are selling the seniors what?

SPEAKER_01 9:28

Yeah, it's it's an interesting question. So as you're saying, it it does look like, I mean, certainly in the UK market, it looks like Mes are still pricing at uh pretty tight levels. I think Mes also, I mean, interestingly, there you know, there was one Euro deal this week, Bank 11, where I think the coverage on the Mes Transites was actually a little bit um weaker than when it issued um earlier this year, which is kind of interesting. It it seems like they they could be differing. Uh, you know, maybe like UK seniors are sort of repricing, maybe Euromes is repricing. Uh it's very early to say that on the Euromes, um, because I I think we just have one deal and we we'll probably need a lot more kind of activity before we can say anything like that. But definitely in the UK market, it's quite interesting because you know, if you're saying a UK non-conforming or buy to let issuer, you're probably going to be issuing a full capital stack deal. If you are able to get you know still that tight pricing on the MES, then you know, in theory, you might be able to somewhat your your overall cost of capital might not be that much more expensive, even if you are having to pay up more on the seniors. And also when you're dealing with these issuers, they're not able to take deposits or probably won't be able to issue cover bonds. So really, you know, RMBS is their sort of bread and butter when it comes to funding. So, yeah, if you look at just that that calculation on their side, I mean, I'm sure the the sort of repricing, I'm sure all the syndicats will have said to them, you know, you may have been able to uh price your seniors ideal in the the kind of mid to low 70s a year ago, but uh it's just the case now that the market shifted and it's it's probably gonna be more like the mid to low 80s currently. And clearly that hasn't discouraged them. We've had plenty of supply from like Lendvest, Enra, and Lenco uh since the market reopened. But yeah, the the other question is, you know, obviously you look at prime RMBS, you're probably just gonna be issuing a senior tranche. So you're gonna be feeling that repricing uh a lot more because there's no sort of tighter uh mesnotes to compensate for that. And also, you know, prime RMBS, I I did sort of a story about it back in July, has been having a pretty rough year. But I don't necessarily think it's like gonna create a big sort of problem for the market because a lot of these prime RMBS issuers just use it as a diversifier because they're you know almost always going to be able to get cheaper funding from deposits and cover bonds. So, you know, although there'll be wider spreads, they they basically get the diversification benefits of yeah, issuing an RMBS every year, then they can get that more sort of devoted investor base. I mean, that's one of the reasons why, you know, as I mentioned, the the West Brom deal probably did price a little bit wider. It's because they, you know, issue more like every kind of two or three years instead of every year. They're able to, you know, issue every year that there's plenty of RMBS investors who are gonna reward you for that and try and uh always participate in your deals and equally for on their side, they they should be able to get uh deeper liquidity um in that sense. So um yeah, I I think it it's definitely interesting in in terms of you know where exactly the the pricing is moving across the stack.

SPEAKER_02 12:25

Okay, great. And we'll um we'll follow it closely again. We expect more deals next week and s and see where those levels come in as well.

SPEAKER_01 12:32

Yeah, yeah, absolutely.

SPEAKER_02 12:33

Okay, interesting. So just looking ahead, do you think there could be a repricing in Euros to come?

SPEAKER_01 12:39

It's really interesting because uh it is quite difficult to tell because some you know I mentioned the the Bank 11 deal, I think it priced at uh 55 basis points on the seniors, which is four bits wider than where uh they came last September. I mean that was like a super record tight, I think, at 51. But it seems like they're they could be, you know, a slight repricing. But also, you know, if you look at Argos with its uh Italian consumer, I mean that basically came in at the the same level on the seniors uh compared to where it was able to price last September. So and I think that that's like probably the best comparison because the these issues uh issuers generally uh go twice a year, and normally one is in September. So um yeah, I I think it's very early to say, I mean, you know, obviously if you're gonna be uh you know euro sort of issuers do benefit from that broader, deeper uh investor base. You can have, you know, there's a couple of investors like you know, a KFW or a Unicred that can put in a big you know 200 million ticket, which really sort of makes the book uh and that advantage that you can get compared to being in the sterling market where you know a lot of those uh investors do have uh a little bit power. It can be a little bit more of a buyer's market sometimes. But yeah, I I think it's it's early to tell with Euros, but it it does look like there could be sort of a little bit of a divergence between um pricing uh and sterling in your orgas.

SPEAKER_02 14:05

Okay, Tom. Well, that all sounds great, and we look forward to speaking about it again next week and catching up where we are. And that story, by the way, is called on Global Capital's website Flurry of Issuers Hit ABS Market, but spread tightening limited. Okay, and next off we turn to Thomas on the CLO market. And as you mentioned, Thomas, it sounds like it's been a very busy week for you also on your return. Um, do you want to tell us a bit about some of the the deals that you've been focusing on and how busy has it actually been?

SPEAKER_00 14:34

It really has been uh quite busy. So yeah, I think the market is sort of I mean, to be fair, the CLO market didn't entirely slow down over the summer. I was quite kept reasonably busy over the summer, but I think a notable difference is that I think quite a few managers were using the summer as a kind of an opportunity to do resets. New issues did continue in the summer, but they did slow down a bit, and that's because ultimately managers often ramp new issue deals using the sort of new kind of primary loan paper, or at least paper from you know the primary loan market, uh, that does include refinancing and repricings as well. And that sort of dries up a bit in August, and so you new issues tend to slow then, whereas now we are definitely seeing a return of you know a lot of new issue deals. So uh just to highlight a couple, I mean, there was Brigade Capital's uh Armada 9 deal came out this week, so that price this weekend with quite a tight triple A spread of 124 basis points, and also managed to price the single B rated notes at par, which is something of an achievement, uh just because you know single B's have been a bit volatile recently and it's been quite hard not to offer at least a bit of OID on the single B's. Silverpoint uh came out with its third deal, so priced its third deal this week. You know, that that's actually SilverPoint has done three new issues CLOs in sort of uh just under a year, because I think it was sort of around October, November last year they did their debut deal. Uh so they've come out, you know, they've they've done a third deal, and then Capital Four did a new issue deal. We also had a new issue, the HPS Aqueduct new issue, and we've also seen a couple of new issues from uh with a cross ocean Bosphorus deal and a new issue from Carlisle. So a lot of new issues have come out this week. But we then we also saw a couple of resets. KKR did a reset for an absolutely ancient CLO that I think was originally priced in 2014. It's been reset sort of since then, but it's now been reset again. It was one of its Evoka deals, and then Fair Oaks has reset its first ever uh CLO as well, or first ever European CLO, I should point out, for the second time, actually. Um so yeah, definitely a busy week, strong pipeline. I think there's quite a lot of sort of positivity uh from CLO managers um at the moment about you know pricing deals.

SPEAKER_02 16:51

Yeah, that's a long list. It's like um you were saying last week, Tom, it's like in a political by-election when you have to get through everyone and read out all the candidates. Um, but there's loads that, and you can read um the stories and the articles and those deals on Global Capital and also check all the details as well in our asset back monitor. And yeah, and and more to come, it sounds like, from your weekly story, which has a great name, CLO Managers Prepare to Feast on Fresh Surge of Leverage Loans. So, yeah, well, tell us a bit about that. And I think you wrote about up to maybe 30 billion or so of new loans is expected. I mean, it it sounds like a lot, is it? And tell us why and why that's all coming now. Is it is it mostly new deals? What were you hearing from people this week?

SPEAKER_00 17:37

Well, yeah, so I think there's quite a lot of positivity in the CLO market, precisely because there is finally, finally, finally some fresh leverage loan paper that is appearing in in the market. Because it's basically since almost since 2022, but for several years, there's been this sort of expectation that there would be some more LBO MA activity, you know, some more leverage loan issuance. And this is incredibly important to CLOs because ultimately these leverage loans are the collateral that make up the CLO portfolios. And there's been an expectation again and again that there would be more CLO, more leverage loan issuance, and there just hasn't been. I think conditions have really been quite tough for private equity sponsors, and uh, you know, I mean, because if you think about it, in 2021, private equity sponsors had a very good time of it, actually, because interest rates were incredibly low, and so they were able to sort of you know launch a whole lot of deals, load up on very cheap debt, um, and so that was very positive. Then we got to 2022, uh, Russia invaded Ukraine, we had an inflationary surge, interest rates were hiked, and at the same time, we actually had public equity markets that have sort of uh soared to kind of record levels over the last few years. And obviously, you know, private equity tends to use public equities as a bit of a benchmark for its returns. So you suddenly had debt that became more expensive, and you know, you were really struggling to get private equity exits that looked attractive relative to public equities. And so, you know, for years we've not seen a lot of new paper issued. But this is changing now. As you said, Sarah, the estimate of how much paper does vary according to which arranging bank you talk to. But yes, 25 to 30 billion is certainly what I think Bank of America is predicting. And I've had that figure actually confirmed by a couple of different, you know, well, uh other market participants have sort of said that they largely agree with what Bank of America is is sort of saying on that. And of that 25 to 30 billion, as much as 80% is expected to be new money transactions. So just to be very clear, that's not anything like a repricing or a refinancing. This is a brand new loan issued as part of like an LBO um to fund you know the acquisition of a company. So it's brand new paper, and uh you we with some names that have been mentioned are like Inpost and Nestle Water, and so you know, ultimately uh this paper is sort of definitely available. And and the some part of the reason for I think why some of this new supply is coming along is that conditions have improved a bit for private equity, you know, it's been a slightly better environment for exits, and I think, you know, while rates are still elevated relative to 2021, they're a bit lower than their sort of peaks in 2022 and 2023, and I think as a result, sponsors were sort of going to launch a whole lot of deals earlier in the year, and then this was kind of scuppered by the Iran war, but now that the market's kind of adjusted to the Iran War and adjusted to the idea of a longer-term conflict, I think what market participants have been saying to me is that there's some sort of pent-up demand, and so these deals are going to kind of come to market.

SPEAKER_02 20:45

Okay. And what do you get the sense from analysts? Are they all positive the impact that that it will have on the CLO market? Is it quite unanimous or um how much how much of a real improvement could we see?

SPEAKER_00 20:58

I mean, it sort of does depend on exactly how much new loan supply there is, because obviously at the moment we're dealing with kind of loose predictions and forecasts. Maybe fewer of the deals will appear, maybe there'll be some deals that people don't yet have visibility on that will come along. So if there's if there's a greater volume of new paper in the loan market, that's obviously positive. And it also kind of depends on the spread levels that we see on these deals. But theoretically, it could benefit CLOs in in several ways. The first is in terms of weighted average spread, because what's been the issue for CLOs when you know we've had a shortage of leverage loans is that ultimately, you know, that's meant that you know, obviously, if you have a shortage of leverage loans relative to sort of strong demand from CLOs, that has the effect of compressing the spreads on loans and lowering the weighted average spread in CLO portfolios. Obviously, if you now have more loan paper, you know, that should maybe see a kind of modest sort of increase to. Spreads just because of sort of supply and demand in terms of, you know, if there's, you know, well, we just with the borrowers and the lenders in this in this sort of situation, with the CLOs obviously being the lenders. Additionally, with new loan paper, it tends to have sort of slightly higher spreads than sort of something that you might see in a repricing or a refinancing, or just you know, any issuance from an existing borrower. And that's because obviously lenders like CLOs have to do more due diligence, you know, on these new companies that they haven't sort of seen in the market before. So ultimately, yes, you could see some stronger spreads in the primary market. We might also see fewer repricings, because what what happens when you have a repricing is essentially borrowers turn to lenders, many of which are CLOs in the leverage loan market, because CLOs hold about 70% of all European leverage loans, so they're a huge blare in that market. But you know, what will happen is the borrower turns to the lenders and sort of essentially says, Well, I'd like either to have a well, you can either accept a tighter spread on this loan or you can be repaid at par. Now, when CLOs have few other options, few other loans they can sort of replace uh that particular credit with, they have little option but to consent to these repricings, take the hit to the weighted average spread, which of course compresses the equity arbitrage, which hits CLO equity returns. So it's quite difficult. But of course, if you've got more loan paper coming in the primary market, CLOs have more options. It's harder for borrowers to push through repricing. So it might sort of stop the impact to uh CLO weighted average spreads uh through repricings. And the third benefit that it could maybe have is in the secondary market for loans, we tend to see a lot of them trading quite close to par. This is because there's just a lot of demand for CLOs because there are too few loans. And at that point, it becomes quite difficult for CLO managers to do what they would otherwise ordinarily do and sort of buy up loans at slightly cheaper prices, let them appreciate in value, sell them, and then flush some of the proceeds through to equity, boosting equity returns. Or they can actually build par in their portfolios as well, which will sort of boost the eventual um IRR. They can't really do that when loans are all at par because they've got no room to appreciate. And in fact, if you're going above par, you actually are exposed to repricing risk. So theoretically, with more loans in the primary market, that could sort of chip away at the large share of loans that currently trade close to par.

SPEAKER_02 24:25

So, in terms of the levels that you're hearing about in terms of new loans, where they might be priced, and how that will compare to say the repricing, what what are you hearing there?

SPEAKER_00 24:36

So at the moment, what we're hearing is certainly that we're going to have quite a few of these new loans kind of in the mid-300s, um, which granted is still quite tight by you know historical levels. In fact, I was talking to a loan investor this morning who said, you know, a few years ago, you know, for brand new loan paper, a spread of sort of 350 over would have been a little bit unthinkable. You'd have you'd have thought that it would have been much more near 400. Um, so it's still quite tight. But you must remember, of course, that we have had repricings kind of in the low 300s. So for managers, and and repricings have formed a lot of kind of like the primary pipeline in recent months. So it is a little bit of respite for managers who suddenly get this increase of like 30, 40, 50 basis points uh on what they can buy uh in the primary market for loans. So, you know, that that is certainly it's positive up to point, but yeah, I mean I think what needs to be clear is that certainly if all these loans as expected come uh you know come to the market with uh and and achieve spreads in the mid-300s, it will improve weighted average spreads in CLO portfolios a bit, it will improve the arbitrage a bit, it will, you know, make a little bit of a difference to sort of cash-on-cash distributions to CLO equity, which have been quite low recently. But this is not going to be a wholesale change to the outlook for CLO equity. It will help it, but with spreads at that level, you you're not going to suddenly see equity returns absolutely soaring um relative to where they are now. Uh, it's going to be more of a kind of modest improvement if, of course, the loans price at those at those levels. That's obviously a big caveat, but that is currently what the market, where the market is expecting them to price.

SPEAKER_02 26:25

And I think that was reflected one of the analysts that you spoke to and also one of the investors. Is it fair to say they they cautioned that the improvement might actually be quite modest and perhaps loan spreads could even tighten again? Is that is that a fair characterization?

SPEAKER_00 26:41

I I think it I think it is a fair characterization. Um, because I think, well, there's a there's a couple of points. I mean, in terms of CLO equity, certainly CLO mezzanine spreads are currently very tight. So, you know, ultimately, you know, even if loan spreads just are at the levels that are currently expected, it can only make a little bit of a difference to the arbitrage because the CLO mezzanine spreads are so tight they can't really be tightened very much further. And so, you know, that that there's this kind of a limit to how much equity returns can be improved unless you get much wider loan spreads that that than are expected. But then also, as you were saying, Sarah, there is a chance ultimately that loan spreads could tighten again. And the reason for this is that what new loan paper might sort of provoke is an increase in CLO activity uh or CLO creation, because there's there's a huge number of CLO warehouses open in Europe at the moment. I mean, it's uh estimates vary, but you know, one sort of market source I spoke to thought there was around 140 warehouses that are open at the moment. Now, CLO managers kind of have the choice to ramp those warehouses slowly or a bit more quickly, depending on you know how much loan supply there is. So with this new uh this new loan supply coming into the market, well, CLO managers might think, oh, well, fantastic, I'm gonna ramp you know um my warehouses much more quickly. And at that point, well, you have a surge in demand for these loans, then and you know, feasibly managers could achieve reasonably tight loan spreads. And you know, if you've got lots of CLO creation, that keeps a lot of the loans quite close to par. And you know, and if loans start to move above par again because there's lots of CLO creation, you have the repricing risk. So a lot really depends on the extent to which managers kind of respond to the new loan supply by creating more and more and more CLOs, because if they do, the improvements might be limited. But you know, it is important to say that any new loan supply tends to be a welcome development for the CLO market. And it remains to be seen just how much benefit they will derive from it, but there will likely be some benefit if all of these if all these deals price as expected. It's just you you you know, one does have to have the kind of caveats of the fact that you know that the benefit might be a little bit limited if CLO creation is very strong kind of in response to this new loan supply.

SPEAKER_02 29:07

Yeah, so it's good news, but we maybe shouldn't get too excited and just manage our expectations. But um it's it's looking good for the CLO market.

SPEAKER_00 29:14

Yeah, I think it certainly is. But yes, managed expectations is the right way to think about it, Sarah.

SPEAKER_02 29:19

Yeah, yeah. Okay, well, great. Thank you, Thomas. And that article again on the Global Capital website is called CLO Managers Prepare to Feast on Fresh Surge of Leverage Loans. Well, that's it for us for this week. Thank you, Tom. Thank you, Thomas. Um, it's been great speaking about these stories, having both of you back again. And um, yeah, thank you very much. We'll speak to you all next week. Goodbye.

SPEAKER_00 29:43

Goodbye. Goodbye.