Palmer Square Capital plans ‘pattern of serial issuance’; CLO deal pipeline remains full

By Cristal Cody

Tupelo, Miss., June 10 – Palmer Square Capital Management LLC expects to return to the CLO primary market following the settlement of its third deal, the $457 million Palmer Square CLO 2014-1, Ltd. offering brought in April.

The Mission Woods, Kan.-based investment management firm hopes to “continue to have a pattern of serial issuance,” Christopher D. Long, president of Palmer Square Capital Management, said in an interview on Tuesday. “We’re certainly looking to build that part of our platform.”

The firm brought two CLO deals in 2013 – the $362.35 million Palmer Square CLO 2013-1, Ltd. transaction and the $463.8 million Palmer Square CLO 2013-2, Ltd./Palmer Square CLO 2013-2, LLC offering.

All three CLOs are designed to invest primarily in institutional senior secured bank loans, according to a news release from the firm.

Palmer Square Capital Management, majority-owned by Montage Investments, the asset management arm of Leawood, Kan.-based Mariner Holdings, has about $4 billion in assets under management.

Part of the growth in CLOs is the “insatiable demand for yield,” Long said. “If you look at CLOs compared to other similarly rated assets, the relative value is tremendous. People have gotten more comfortable that the structure really does work, and as a result, you’re seeing a new buyer base that’s coming into the market.”

Pension funds, asset managers and banks are showing more activity in the AAA tranches, he said.

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