Clarion Capital says secondary CLO equity pricing nears loan portfolio NAV, implying attractive entry points
CLOZ•Clarion Capital Partners said secondary CLO equity offered better relative value than new-issue equity in September 2026, with pricing near underlying loan portfolio NAV. It estimated 70%-80% of lifetime CLO equity cashflows typically come from NIM distributions and found that NIM of at least 130 basis points generally corresponded to a price premium.
1. Secondary CLO pricing
Clarion Capital Partners said secondary CLO equity offered better relative value than new-issue equity in September 2026, with recent pricing at a discount or slight premium to underlying loan portfolio NAV. The firm estimated that 70%-80% of lifetime CLO equity cashflows typically come from NIM distributions rather than final liquidation value; NIM of 130 basis points or more generally corresponded to a premium. Clarion measured a 54% R-squared between NIM and price premium or discount, compared with 48% for loan spread.
