Redan Park Asset Management, Feingold O'Keefe Capital in CLO deal pipeline; spreads widen

By Cristal Cody

Tupelo, Miss., Jan. 7 - New issuance in the collateralized loan obligation market likely will be put off until the upcoming week, according to an informed source on Tuesday.

The CLO market initially expected some primary activity later in the week. So far, the market has been quiet, but the first deal in 2013 did not price until Jan. 15, a source noted.

"There hasn't been a ton of trading in the secondary market yet, either," an informed source said. "The Volcker news at the end of the year widened triple A and double A spreads a little bit."

Selling was more brisk just before Christmas, the source said.

AAA-rated CLO tranches are currently in the Libor plus 150 basis points to 155 bps area, according to a market source. AA-rated CLO notes are in the Libor plus 215 bps to 220 bps range.

A couple of CLOs may price over the next few days, but many market participants are waiting to see what additional clarification regulators offer on the Volcker Rule, sources said.

Regulators are expected to provide an update by Jan. 15.

Under the rule issued on Dec. 10, banks may not hold ownership interests in CLOs that hold securities. The Loan Syndications and Trading Association and other groups have sought clarification on the impact to banks that hold senior tranches of CLOs and CDOs backed by trust-preferred securities.

The Volcker Rule could "set back the market until spring," a source said.

More than $13 billion of broadly syndicated and middle market CLO deals are in the pipeline, according to market sources.

Redan Park Asset Management LLC and Feingold O'Keefe Capital, LLC both are expected to price CLO transactions.

Feingold O'Keefe was the first CLO manager to price in 2013 with the $515 million Longfellow Place CLO 2013-1, Ltd. transaction.

Redan Park preps CLO

Redan Park Asset Management intends to place a $300 million CLO, according to an informed source.

C&Co/PrinceRidge LLC will arrange the deal.

Redan Park Asset Management, an asset management firm formed in 2012 to invest in high-yield loans, is owned by New York hedge fund Mead Park Holdings LP and Puerto Rico-based Doral Financial Corp.

Feingold O'Keefe on tap

Feingold O'Keefe Capital is in the pipeline with the $400 million Staniford Street CLO, according to an informed source.

StormHarbour Securities LP is the placement agent.

Feingold O'Keefe Capital brought its first CLO since 2007 in January 2013 when it sold the $515 million Longfellow Place CLO 2013-1 deal.

The alternative asset investment firm is based in Boston.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.