Altice Stress Weighs on CLO Market, Sound Point Says

Altice’s debt woes pose a threat to the collateralized loan obligation market, says Gunther Stein, chief investment officer for US performing credit and CLOs at Sound Point Capital Management. “Altice is clearly an issue for Europe, and in particular the European CLO market,” Stein tells Bloomberg News’ Carmen Arroyo and James Crombie and Bloomberg Intelligence’s Robert Schiffman in the latest Credit Edge podcast. “It’s something we all have to be thoughtful around in terms of how we’re managing our portfolios,” he said, referring to investors’ exposure to borrowers with large capital structures. While the US leveraged finance market is bigger and more diversified than Europe, Altice is also a “relevant” borrower there, Stein adds. He expects higher-for-longer rates to boost leveraged loans and sees value in the technology and cable sectors, as well as health care companies like LifePoint. “There’s good value still in the leveraged loan space,” says Stein. In this episode, Sound Point also discusses CLO issuance, pricing and leveraged loan liquidity. See omnystudio.com/listener for privacy information.