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.

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