August CLO primary action slows; Carlyle, Canyon Capital price; secondary market active

By Cristal Cody

Eureka Springs, Ark., Aug. 10 – CLO primary action remains mostly quiet in August after a busy July deal pipeline, market sources report.

Carlyle GMS CLO Management LLC brought $498.7 million of notes in the Carlyle Global Market Strategies CLO 2016-3, Ltd./Carlyle Global Market Strategies CLO 2016-3 LLC transaction, according to a market source.

The CLO transaction, Carlyle’s third U.S. deal year to date, priced via Citigroup Global Markets Inc.

Also, Canyon CLO Advisors LLC priced $461 million of notes due Aug. 20, 2028 in the Canyon Capital CLO 2016-2, Ltd./Canyon Capital CLO 2016-2, LLC transaction. J.P. Morgan Securities LLC was the placement agent. Final pricing details were not available by press time.

“As we enter August, the new issue market has started to quiet down somewhat,” Bjarni Torfason, Deutsche Bank Securities Inc. analyst, said in a note released on Wednesday. “One new CLO priced last week and one already this week.”

Carlyle’s deal continues the trend of tighter spreads, with the AAA tranche among the tightest seen this year with a discount margin of Libor plus 151 basis points, he said.

Secondary market activity this week also remains active after high volume over the previous week.

On Tuesday, 30 investment-grade CBO/CDO/CLO issues totaling $247.8 million and 44 non-investment-grade CBO/CDO/CLO securities totaling $269.9 million were traded, according to Trace.

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