New CLO notes tighten; Och-Ziff Loan Management preps $619.79 million CLO

By Cristal Cody

Tupelo, Miss., June 11 – New collateralized loan obligation notes have priced tighter in the past month as issuance remains strong, according to Deutsche Bank Securities Inc. on Wednesday.

CLO AAA notes have priced about 5 basis points tighter at the Libor plus 150 bps area on average, while new issue A-rated notes have firmed about 10 bps to the Libor plus 320 bps area, a Deutsche note said.

New BBB CLO notes have priced about 15 bps better on average in the past month to the Libor plus 425 bps area.

“Interest in AAA and equity has been driving the heavy volumes and spreads for the most senior tranche are starting to tighten, even amid the hectic issuance,” Bjarni Torfason, a CLO analyst with Deutsche Bank Securities, said in the note. “Mezzanine spreads showed a bit more resilience as a couple of bid lists traded well and newly issued deals showed strong prints for the bonds.”

More than $50 billion of CLOs have priced year to date. In June, eight CLO deals totaling $5.4 billion have priced.

Coming up, Och-Ziff Loan Management, LP plans to bring a $619.79 million CLO offering, its first transaction since March, according to a market source.

In the secondary market, AAA CLO notes are trading unchanged on average in the Libor plus 140 bps to Libor plus 150 bps area, according to a market source.

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