Fitch Ratings-New York-22 November 2021: Private equity (PE) collateralized fund obligations (CFOs) rated by Fitch Ratings have exhibited stable performance since recovering from the coronavirus-driven economic downturn and market volatility, with cash flows and loan-to-value ratio measures returning to pre-pandemic levels or better. Driving this performance are significantly improved market conditions and the transactions’ structural features, such as de-leveraging mechanisms.

One PE CFO was issued in 2021 (Astrea VI, in March 2021), a figure similar to 2020. Uncertainty caused by regulatory proposals as well as the pandemic-driven market volatility has hampered issuance in both years. As the pandemic recedes and regulators provide additional clarity, the market may rebound in 2022.

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