Private Credit: Structured Credit Trend Watch—Issuance Regains Momentum Despite Macro Uncertainty

U.S. collateralized loan obligation (CLO) issuance regained momentum over the summer despite a challenging macroeconomic backdrop. In recent months, CLO liability spreads have remained relatively tight amid persistent investor demand and manageable credit conditions. These conditions supported issuance, with volumes over the first two months of 3Q 2026 nearly surpassing the total recorded in 2Q, bringing year-to-date (YTD) new issuance activity in the U.S. broadly syndicated loan (BSL) and middle market (MM) to more than $111 billion as of August 2026. Still, total issuance remains approximately 20% below last year’s pace, mainly due to weak collateral formation and more difficult arbitrage conditions for BSL CLOs. Meanwhile, YTD 2026 MM and private credit (PC) CLO activity has kept pace with the prior year despite modest widening in MM CLO AAA spreads. In Europe, BSL volumes have largely kept pace with 2025, reaching nearly EUR40 billion in YTD issuance. European MM CLO volume…