Fourth-quarter primary pickup forecast; Seix prices $518.5 million; mezzanine notes widen

By Cristal Cody

Tupelo, Miss., Sept. 2 – CLO issuance is expected to ramp up over the week following the long weekend, according to market sources on Tuesday.

“We expect a pickup in issuance after Labor Day, and the primary calendar looks to be quite active through Q4,” Wells Fargo Securities, LLC senior analyst Dave Preston and associate analyst Jason McNeilis said in a note.

CLO offerings expected in the near-term primary market include deals from Silvermine Capital Management LLC and Octagon Credit Investors, LLC. Also, Alcentra Ltd. plans to bring a €414 million transaction via Morgan Stanley & Co. International plc.

In new issuance, Seix Investment Advisors LLC brought $518.5 million of notes due Sept. 15, 2026 in the Mountain View CLO 2014-1, Ltd./Mountain View CLO 2014-1, Corp. transaction, according to a market source.

The CLO priced $316.75 million of class A floating-rate notes at Libor plus 151 basis points at the top of the capital structure.

Morgan Stanley & Co. LLC was the underwriter.

CLO secondary trading remained light in the last half of August, according to the Wells Fargo note.

“What little investor focus that has appeared has been directed at the primary market,” the analysts said. “Mezzanine tranches continue to drift wider, as BB tranches are 50 bps wider since April.”

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