CLO issuance on track; spreads tighten across capital stack, BBBs in 45 bps year to date

By Cristal Cody

Tupelo, Miss., March 2 – Two new CLO deals helped push total issuance to more than $14 billion year to date, according to market sources and data compiled by Prospect News.

Invesco Senior Secured Management, Inc. sold an upsized $618 million of notes in the Betony CLO Ltd./Betony CLO LLC offering, a source said.

The deal was upsized from $515.5 million.

Morgan Stanley & Co. LLC was the placement agent.

Crestline Denali Capital, LP brought $413.7 million of notes in the Denali Capital CLO XI, Ltd./Denali Capital CLO XI, LLC transaction, according to a market source.

Natixis Securities Americas LLC was the placement agent.

Final pricing terms were not available by press time.

CLO issuance year to date is ahead of the same period a year ago.

Issuance through the first two months of 2014 was $8.9 billion, according to Wells Fargo Securities, LLC.

In the secondary market, U.S. 2.0 CLO spreads remained firm over the past week due to a “relatively light primary supply and strong demand,” BofA Merrill Lynch analysts said in a market note.

Spreads have tightened across the capital structure.

U.S. CLO AAA notes traded at Libor plus 153 bps, 2 bps tighter and 10 bps better year to date, the note said.

BBB spreads firmed to Libor plus 430 bps, 10 bps better from a week ago and 45 bps stronger since January.

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