...Tariff announcements have led to a notable decline in asset bid levels within Fitch-rated U.S. broadly syndicated loan (BSL) CLO portfolios. By the end of the first week of April, the weighted average bid of CLO portfolios had dropped to 95.0 on average, down from 96.7 at the end of February. This shift is evident as assets with bid levels of 95 and above now comprise only 81.7% of the aggregate CLO portfolio, a reduction from 88.2% in February. Meanwhile, assets with bid levels ranging from 90 to less than 95 have increased their share to 9.5%, up from 5.2% during the same period. The building and materials sector experienced the most significant decline among Fitch industries, with a 3.6-point drop in its weighted average bid levels within the last month, but the sector only accounts for 4.4% of the aggregate portfolio. CLOs are not forced sellers during periods of market volatility, but they can still realize gains and losses from trading activity. Excess 'CCC'-rated and defaulted assets...
