CLO primary action quiet in February; secondary trading thin in U.S., European markets

By Cristal Cody

Tupelo, Miss., Feb. 22 – CLO primary action remains quiet to date in February with no U.S. broadly syndicated deals priced yet over the month, but a number of transactions remain in the pipeline, according to market sources on Monday.

CLO managers including Credit Suisse Asset Management, LLC, Neuberger Berman Fixed Income LLC, Crestline Denali Capital, LP, Prudential Investment Management, Inc. and CreekSource LLC intend to price U.S. CLO transactions.

Two U.S. broadly syndicated CLOs totaling $826 million and one $348,006,000 middle-market-backed CLO deal have priced year to date, according to Prospect News data.

In the European primary market, two euro-denominated CLOs totaling €824.59 million have priced in 2016, including BlackRock Investment Management (UK) Ltd.’s €410,238,000 BlackRock European CLO I Designated Activity Co. deal placed on Feb. 10.

No CLOs have been refinanced to date in the U.S. or European markets year to date, according to market sources.

U.S. secondary trading action slowed over the shortened holiday week with BWIC volumes of about $210 million, BofA Merrill Lynch analysts said in a market note.

AAA spreads pushed 5 basis points wider to the 185 bps area, the analysts said.

AA, BBB and BB notes widened 25 bps in the past week to 275 bps, 635 bps and 1,125 bps, respectively, BofA Merrill Lynch said.

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