Credit Suisse brings €413.53 million dual-currency CLO; U.S. pipeline slows; BBs tight

By Cristal Cody

Tupelo, Miss., May 21 – Credit Suisse Asset Management Ltd. tapped the market with a dual-currency collateralized loan obligation offering, according to a source on Thursday.

Credit Suisse Asset Management sold €413.53 million equivalent of dual currency notes with the AAA-rated tranches priced at Euribor/Libor plus 130 basis points.

European CLO issuance totals more than €9 billion in 13 deals year to date, with €4.6 billion priced in May, according to data compiled by Prospect News.

The U.S. market remains steady with more than $49 billion of CLOs brought year to date but is showing signs of cooling ahead of summer, according to Prospect News data and market sources.

CLO managers have priced $4.1 billion of deals so far in May, compared to $10.4 billion priced in April, according to a Wells Fargo Securities, LLC report.

“We expect to see a slowdown in issuance continue through May to possibly July, as it will take issuers longer to accumulate collateral due to a decrease in loan issuance,” Wells Fargo senior analyst Dave Preston said in the report.

Wells Fargo forecasts 2015 issuance of $90 billion.

In the secondary market, CLO AAA-rated notes have tightened 3 bps over the past month to the Libor plus 145 bps area, Preston said.

AA spreads were quoted 5 bps tighter on the month at the Libor plus 195 bps area.

BB notes have tightened 65 bps from a month ago to the Libor plus 535 bps area.

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