Clarion Capital flags potential inflection point for CLO equity as loan supply rises, issuance slows

  • Clarion Capital Partners flagged a potential inflection point for CLO equity as loan supply-demand dynamics begin to rebalance.
  • Private equity exit pressure could lift new-issue loan supply; Pitchbook data show 40% of PE portfolios held 7+ years.
  • New-issue CLO creation slowed as third-party CLO equity support faded; issuance was down 20% through May versus a year earlier.
  • Credit risk remains priced near cycle tights; ICE BofA US High Yield OAS was 2.6% on June 17, 2026, near the 2.4% 2007 low.
  • Clarion expects spread widening to raise reinvestment yields for existing CLOs, potentially improving CLO equity cash yields as loan prices fall.


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