PitchBook has indicated that the collateralized loan obligation (CLO) sector demonstrated robust momentum in late May 2026, as U.S. managers priced over $5 billion in new issues during the final week of the month. This activity capped a strong period for the market, even as overall year-to-date issuance trailed the previous year’s record pace. According to the latest PitchBook data, US new-issue volume reached $16.77 billion in May, a solid recovery from April’s $6.20 billion.
PitchBook added that year-to-date through May 29, new issuance stood at approximately $70 billion, lagging 2025’s comparable figure by about 15%.
According to the research study, key feature of May was the surge in refinancing and reset transactions, which hit a record $39.05 billion—the highest monthly total tracked over the past decade.
This eclipsed the prior peak of $38.61 billion from August 2025. Resets accounted for $22.14 billion across 44 deals, while refinancings contributed $16.91 billion through 43 transactions.
Analysts attribute this wave to attractive spread opportunities for 2023 and 2024 vintage deals, combined with notable premiums available on mezzanine tranches in shorter-dated refinancing structures.
Investors showed particular interest in short-term refinancings featuring non-call periods of one year or less.
These offered 10–30 basis points of additional spread on AA, A, and BBB notes compared to equivalent new-issue paper.
For instance, refinanced AA tranches recently priced around S+162 bps versus S+155 bps for new issues, with similar widening observed in single-A and triple-B layers.
Risk considerations played a key role, as elevated exposure to software assets and other tail risks in certain portfolios made full resets challenging, favoring shorter-term refinancings instead.
New-issue pricing remained disciplined. Triple-A spreads on broadly syndicated loan (BSL) CLOs averaged 124 bps in the final week (excluding static deals), slightly above May’s monthly average of 123 bps but tighter than April’s 127 bps.
The weighted average cost of capital (WACC) for BSL deals eased to 156 bps in May from 165 bps in April, marking the lowest level since February. This tightening across the liability stack supported continued issuance momentum.
In Europe, activity was more measured but positive, with two new issues, two resets, and one refinancing completing during the period.
New deals from emerging managers like Muzinich (debut) and Elmwood (second print) featured slim premiums, with triple-A spreads at 129 bps and 128 bps respectively—only modestly wider than established platforms pricing in the mid-120s.
Both transactions achieved triple-B pricing below 300 bps, contributing to WACC figures comfortably under 200 bps (189 bps for Elmwood and 196 bps for Muzinich).
PitchBook also pointed out in the research report thar resets for earlier 2024 deals and a selective AAA refinancing further highlighted strong technical conditions.
Notable U.S. transactions included GoldenTree’s $726 million deal (tightest AAA at S+118 bps), IFC’s emerging markets CLO, and several others from managers like CIFC, Abry, Sculptor, and Brigade.
The pipeline remains healthy heading into June, with managers targeting issuance ahead of industry events.
Relatively strong investor demand at the mezzanine level and favorable liability costs continue to drive activity, even as supply in secondary markets struggles to meet deployment needs.
According to the insights from PitchBook, the CLO market in mid-2026 reflects a balance of record refinancing activity and steady primary issuance amid tightening spreads.
This curreny environment underscores greater investor confidence in the asset class despite selective risk tiering in underlying portfolios. The PitchBook research report has now concluded that as technicals hold firm, the sector seemingly appears positioned for sustained participation through the remainder of 2026.
