AIG prices $508 million CLO; October primary market active; CLO BB tranches widen

By Cristal Cody

Tupelo, Miss., Oct. 22 – AIG Asset Management (EU) CLO LLC priced $508 million of notes in the manager’s second broadly syndicated CLO deal of the year.

The U.S. primary market continues to be active with five new deals and five refinancing transactions priced over the past week, bringing year-to-date supply to $92 billion and refinancing volume to $39 billion, according to a BofA Merrill Lynch research note released Monday.

Several deals are in the pipeline with October expected to see dollar-denominated supply of at least $9 billion, the note said.

In the secondary market, BWIC volume totaled $725 million last week.

“CLO performance often lags that of the leveraged loan market, which has seen pricing conditions deteriorate in the past couple of weeks before stabilizing this week,” BofA Merrill Lynch analysts said.

CLO BB tranches have seen a sell-off in October with spreads widening as loan prices dropped, Wells Fargo Securities LLC analysts Dave Preston and Powell Eddins said in a note on Monday.

“New issue BB spreads are at least 25 bps wide of the levels of late July, and 15-25 bps wider than September 20,” the Wells Fargo analysts said.

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