Anchorage prices $517.5 million CLO; BlueMountain upsizes; AAA, A spreads unchanged

By Cristal Cody

Tupelo, Miss., Aug. 24 – Details emerged on new CLO issuance that brings year to date U.S. volume to nearly $80 billion, according to market sources and Prospect News data.

Anchorage Capital Group, LLC brought a $517.5 million CLO offering.

BlueMountain Capital Management LLC priced an upsized $457.25 million deal.

“August is on pace to be the second consecutive month with less than $7.5 [billion] in new issue U.S. CLO supply following the $7.3 [billion] total in July,” J.P. Morgan Securities LLC analysts said in a note.

The sell-off in stocks and widening credit spreads seen over the last week and on Monday are expected to impact CLOs, with spreads forecasted to move wider in the month ahead, according to BofA Merrill Lynch.

“Given the broad market volatility, some warehouse facilities likely became underwater and we expect to see slower issuance in the near term,” BofA Merrill Lynch analysts said in a note. “On the other side of the Atlantic, no new deals have priced thus far in August. However, we expect the rest of the year to be busy.”

More than €9 billion of CLOs have priced year to date. BofA Merrill Lynch forecasts €18 billion of euro-denominated CLO issuance for the year.

Meanwhile, AAA-rated CLO spreads remain unchanged at the Libor plus 150 basis points area. CLO A-rated spreads were flat at the Libor plus 300 bps area, BofA Merrill Lynch said.

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