KBRA Releases Research – Structured Credit Trend Watch: Tariff Uncertainty Clouds Issuance

KBRA releases research examining trends across the structured credit landscape. The structured credit and collateralized loan obligation (CLO) marketplace entered the new year on the heels of record-setting issuance in 2024. Despite general economic and political uncertainty at the start of the year, ample dry powder continued to flow into the asset class, causing broadly syndicated loan (BSL) and middle market (MM) CLO AAA spreads to tighten to multiyear lows. Total U.S. CLO volume for Q1 reached approximately $45 billion as of the end of March, trailing the year-ago tally by just $3 billion. The European CLO market had its strongest Q1 ever, suggesting another record year for global issuance was in the making.

Evolving tariff policies have introduced a high degree of uncertainty into markets, including for CLOs and other types of structured credit products. Following the initial tariff announcements and subsequent market volatility, spreads have already started to widen, and several transactions have been put on hold. The 90-day pause on certain tariffs, announced April 9, offered a sense of temporarily relief, and we anticipate that issuers may look to reignite transactions during this window.

In this report, we provide an overview of the overall structured credit market, including new issue deal volume, benchmark spread levels, notable activity, and other trends through Q1 2025. In addition, we provide a recap of KBRA’s 2025 rating and surveillance activity.

Click here to view the report.

Recent Publications

• Assessing the Ripple Effect: Tariff Uncertainty Clouds Structured Finance Outlook
• Private Credit: BDCs, Asset Managers, and MM CLOs Square Off Against Trade Tensions and Market Volatility
• Private Credit: Tariffs and Market Volatility Impact on Private Credit Corporates
• Private Credit: The ABCs of Revolving Credit Facilities
• An Inside Look at Recurring Revenue Loan ABS
• Recurring Revenue Loan Metrics Dashboard: Q4 2024
• 2025 Structured Credit Sector Outlook: Favorable Currents for Sustained Flow
• European CLO Manager Style Comparisons: April 2024 Update
• European Securitisation: Shifting Funding Strategies
• European CLOs: Too Big to Hold?
• Navigating European CLO Tail Risk: Mind the Amortisation Gap
• Private Credit: Potential for European MM and Direct Lending CLOs

About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

Doc ID: 1009157

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