Prudential to price $401.75 million CLO; BB, BBB spreads tighten, BBBs ‘in vogue’ for week

By Cristal Cody

Eureka Springs, Ark., April 15 – CLO primary action looks set to pick up in April, while CLOs continued to trade better in the secondary market on the week, according to sources on Friday.

Prudential Investment Management, Inc. plans to bring back a CLO deal it pulled from the primary market in February. The firm intends to price $401.75 million of notes in the Dryden 42 Senior Loan Fund/Dryden 42 Senior Loan Fund LLC transaction.

CLO managers priced one deal each in the U.S. and European primary markets over the week as previously reported.

BlueMountain Capital Management LLC brought the $424 million BlueMountain CLO 2016-1 Ltd./BlueMountain CLO 2016-1 LLC deal.

Credit Suisse Asset Management Ltd. tapped the European market with the €411.65 million Cadogan Square CLO VII BV offering.

In the secondary market, spreads were tighter across the capital stack and across vintages, Wells Fargo Securities, LLC analysts said in a note on Friday.

BB-rated tranches firmed 10 basis points on the week, and BBB spreads came in about 25 bps this week, according to the note.

“The secondary rally continued in U.S. CLOs, with healthy trading volumes,” the analysts said. “BB tranches continue to be in demand, but BBB tranches especially seemed to be in vogue this week.”

On Thursday, 67 investment-grade CBO/CDO/CLO issues totaling $657.39 million and 21 non-investment-grade CBO/CDO/CLO securities totaling $116.03 million were traded, according to Trace.

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