Credit Suisse Asset offers $504.75 million deal; CLOs under pressure; secondary pace light

By Cristal Cody

Tupelo, Miss., Feb. 19 – CLO primary action for March is looking stronger with a new U.S. deal expected to price from Credit Suisse Asset Management, LLC, according to market sources on Friday.

Credit Suisse Asset Management plans to price a $504.75 million CLO.

Neuberger Berman Fixed Income LLC, Crestline Denali Capital, LP, Prudential Investment Management, Inc. and CreekSource LLC also are in the deal pipeline.

CLO primary action has been light year to date.

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.

CLOs are “under pressure,” and energy defaults are likely in the near term, Barclays analysts said in a note on Friday.

“Markets stabilized this week as oil rallied following OPEC talks about a production freeze,” the analysts said. “Despite the jump, oil prices are still 24% below where they were when we made our forecasts for 2016 returns at the beginning of December.”

Barclays revised its 2016 loan total return forecast down to 3% to 4% from 5% to 6%.

Secondary trading has been light over the week and concentrated in the U.S. AAA and mezzanine tranches, a market source said.

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