Wellfleet prices; Cerberus sells middle-market CLO; MJX refinances; CLO spreads tighten

By Cristal Cody

Tupelo, Miss., April 4 – While refinancing activity remains strong in the CLO market, new deals also are pricing.

Wellfleet Credit Partners, LLC placed a $457.8 million broadly syndicated CLO.

Cerberus Capital Management, LP brought a $604.31 million middle-market deal.

In refinancing action, MJX Asset Management LLC refinanced $407 million of notes from a 2014 CLO transaction.

“Refinancing activity was highly active in Q1; 103 deals refinanced, while six deals were reset over the quarter,” Wells Fargo Securities LLC analysts said in a note on Tuesday. “Year to date, refinancing/reset activity totals approximately $59 billion.”

The CLO secondary market also has been active in the first quarter of 2017.

“Secondary Trace volume increased nearly 66% [month over month] to $8.26 billion – the highest level since December 2016,” according to the Wells Fargo note.

Primary and secondary spreads tightened in March, the analysts said.

“Primary spread levels were tighter 2-5 [basis points month over month] for IG tranches, while BBB and BB tranches were 5-10 bps tighter,” the Wells Fargo analysts said. “Secondary spreads tightened relatively more – IG tranches tightened 7-30 bps, while lower-rated tranches were flat to slightly tighter [by 0 to 10 bps].”

CLO primary middle-market AAA spreads have tightened about 15 bps since February, according to the note.

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