CLO refinancing action resumes; MJX partially reprices three vintage CLOs; AAAs improve

By Cristal Cody

Tupelo, Miss., Aug. 10 – The CLO refinancing space has resumed activity after coming to a standstill following the Covid-19 pandemic start in March.

MJX Asset Management LLC repriced the fixed-rate tranches from three vintage CLOs issued in 2017 and 2018.

“Refis of fixed-rate tranches have increased as swap rates have rallied by 140 [basis points] since the beginning of the year,” BofA Securities, Inc. analysts said in a research note released on Monday.

“On a yield basis, it is cheaper for issuers to refi those bonds despite spreads widening,” the analysts said. “Since Covid, at least eight deals have refinanced their fixed-rate tranches and we estimate another 40 deals with fixed-rate bonds that could reduce their liability costs if they refi.”

Fixed-rate tranche yields are lower by 107 bps versus 2019 year-end levels despite higher spreads, with managers and equity holders now opting to refinancing outstanding fixed-rate investment-grade bonds, according to the report.

Refinancing volume totals about $23 billion year to date, while new issue supply totals about $44 billion, according to market sources.

Meanwhile, CLOs remained “well bid across the capital structure” for the past week, according to the BofA report.

AAAs tightened an average 5 bps to Libor plus 145 bps.

BWIC volume was down 40% on the week with $392 million of AAA and BB tranches making up the majority on lists, according to the note.

MJX reprices CLOs

MJX Asset Management repriced $50.7 million of notes from its Venture XXVIII CLO, Ltd./Venture XXVIII CLO, LLC transaction.

The original $537,100,003 CLO was issued July 18, 2017.

MJX also repriced $55 million of notes from its Venture 28A CLO, Ltd./Venture 28A CLO, LLC offering.

Venture 28A was originally issued on July 28, 2017.

In addition, MJX repriced $52.85 million of notes from the vintage 2018 Venture 32 CLO, Ltd./Venture 32 CLO, LLC transaction.

The 32 CLO notes originally were issued July 18, 2018.

Jefferies LLC was the refinancing placement agent on all three transactions.

The CLOs are backed primarily by broadly syndicated first lien senior secured corporate loans.

The asset management firm is based in New York City.

© 2015 Prospect News.
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