US CLOs have great expectations for the new year, after shattering predictions in 2024.

Combined new issuance for US BSL and middle-market CLOs is projected to be anywhere from $180bn to $215bn in 2025 and could break records set only this year, according to several bank CLO research outlooks reviewed by 9fin.

A sizable portion is expected to come from middle-market or private credit CLOs, which made up around 20% of US new issuance this year, but research desks are united in expecting middle-market CLO new issuance to break new records set in 2024.

On the repricing front, research desks generally expect volumes to match or exceed 2024’s high levels, again weighted towards resets, although refinancings could also pick up if spreads stay tight.

Across the pond, the mood is equally ebullient. Bank research desks forecast €45bn-€50bn of new issuance and €33bn-€60bn of repricings in 2025, which would break records in Europe.

Demand for triple-As remains robust with CLO ETFs becoming a welcome addition to the investor base, while other big investors are expected to step up or maintain their interest in CLO paper. These are ideal conditions for spreads to tighten.

However, macro uncertainty from tariffs and policy, the risks to recovery that LMEs pose, and asset-side risks of delays in primary loan supply and high prices, could temper this picture.