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CLO primary active; National Bank of Greece private placement ahead; secondary demand up
By Cristal Cody
Eureka Springs, Ark., Aug. 2 – The U.S. and European CLO primary markets remain active, while secondary demand has climbed, according to sources on Tuesday.
“The primary market has seen a pickup in activity in the past week, as seven deals have priced in the past two weeks for a total of $3.1 billion,” Wells Fargo Securities LLC analysts said in a note released on Tuesday. “However, the primary market is not necessarily back in full swing; year to date, primary issuance is $32.0 billion, approximately 48% of 2015 year-to-date issuance.”
The National Bank of Greece SA’s €644.77 million private placement offering of notes due 2035 in the Sinepia DAC small and midsize enterprise CLO deal remains in the pipeline, according to a market source.
The Sinepia offering is the Athens-based bank’s first cash flow SME CLO deal since the 2007-2008 financial crisis, S&P reported.
HSBC Bank plc and National Bank of Greece are the deal arrangers.
The CLO is collateralized by static secured and unsecured loans originated by National Bank of Greece and granted to small and midsize companies.
In the secondary market, spreads have tightened from a month ago, according to the Wells Fargo note.
“Secondary demand for U.S. CLOs has picked up, including further down the capital stack,” the analysts said. “Spreads have continued to move tighter on increased demand; on a month-over-month basis, the single-A, BBB and BB tranches are 45 bps-85 bps tighter. The AAA and AA tranches have also moved tighter, approximately 13 bps and 10 bps, respectively.”
Euro AAA 2.0s are 17 bps tighter month over month at 125 bps plus Euribor, according to the note. Euro BBs traded 45 bps better on the month at 720 bps over Euribor.
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