The loan market is on lookout for the next Altice-like shock, and some believe the laboratory services companies that thrived during Covid and dived afterwards could create the next big headache for European CLO managers.

The impact of distress in widely held capital stacks took centre-stage in March when Altice France said it expected creditors to take losses in order to tame leverage. A selloff ensued, and a rating cut caused problems for those CLO managers whose triple-C buckets were already near their limits.

Ultimately, the Altice selloff didn’t cause the CLO meltdown some had feared, nor the fire-sales that some reports warned of. But it put investors on edge, especially because a handful of other European credits — including Ardagh, Atos and Intrum — fell into distress around the same time.