Neuberger Berman brings CLO AAs at ‘tightest’ print of year; mezzanine spreads soft

By Cristal Cody

Tupelo, Miss., June 19 – Neuberger Berman Fixed Income LLC entered the market for the first time this year with a $410 million CLO offering via BNP Paribas Securities Corp., market sources said on Friday.

Neuberger Berman priced the AA-rated notes at Libor plus 180 basis points, “the tightest AA print of the year,” according to a report on Friday from Wells Fargo Securities, LLC senior analyst Dave Preston and associate analyst Mackenzie Miller.

New issue CLO AA spreads in general have priced lately in the Libor plus 190 bps to Libor plus 200 bps area, the analysts said.

Neuberger Berman, a Chicago-based firm that is part of Neuberger Berman Group, LLC, priced three CLOs in 2014. Final pricing details for the new deal were not available by press time.

“New issue AA spreads also look tight compared to the rest of the capital stack,” according to the Wells Fargo report. “While mezzanine spreads are still softer on the month, CLO senior spreads are slightly wider, but are generally more resilient. However, the market is seeing a convergence of 1.0, [refinancing] and primary AAA spreads.”

Pre-crisis CLO 1.0 AAA spreads are in the Libor plus 110 bps to 140 bps area, while refinanced AAAs sit in the Libor plus 130 bps range, the analysts said.

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