CLO Issuance Surges 160% as Equity Markets Soar and Credit Spreads Tighten

Equity markets at record highs and credit spreads near their tightest levels are fueling a CLO issuance boom. Major European institutions are driving this growth, with the market potentially reaching its highest levels since the great financial crisis.

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2025 October 23 . 8:03 AM

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CLO Issuance Surges 160% as Equity Markets Soar and Credit Spreads Tighten

Equity markets have soared to record highs, while credit spreads are near their tightest levels in years, creating an ideal environment for Collateralized Loan Obligation (CLO) sponsors. This favorable backdrop has driven a significant increase in CLO issuance volumes.

Year-to-date, CLO issuance has surged by 160% compared to the same period last year. In September 2025 alone, issuance volumes reached €5.6bn, more than tripling the €1.7bn figure from August 2025. This robust activity is being fueled by strong new issue activity and a healthy pipeline of resets in the European CLO market.

Kartesia's head of CLOs, Michael Htun, and structured credit manager, Panagiotis Dounavis, credit the market's momentum to favorable conditions. They suggest that the market is on track to potentially reach its highest levels since the great financial crisis. Key European institutions driving this growth include Lupus alpha with its Lupus alpha CLO High Quality Invest A fund, BlackRock, Janus Henderson, and Reckoner Capital, which launched a CLO ETF focused on BBB-rated loans in 2025.

The European CLO market continues to thrive, with stock markets at all-time highs and credit spreads near their tightest levels. This has led to a significant increase in CLO issuance volumes and a robust pipeline of resets. Major European institutions are actively participating in this growth, contributing to the market's potential to reach its highest levels since the great financial crisis.