BMO prices $352.1 million middle-market CLO; Palmer eyes reprint; AAA spreads firm

By Cristal Cody

Tupelo, Miss., May 20 – CLO middle-market supply rose to more than $4 billion year to date following a new issue from BMO Asset Management Corp., according to market sources on Monday.

BMO Asset Management priced $352.1 million of loans and notes in the middle-market offering on Friday.

The transaction is the manager’s first new middle-market CLO deal since 2015. The CLO manager refinanced one vintage middle-market CLO in 2018.

About $45.5 billion of middle-market and broadly syndicated CLOs combined have priced year to date, compared to $46.6 billion of issuance seen in the same period a year ago, according to a BofA Securities research note released on Monday.

In the broadly syndicated CLO market, Palmer Square Capital Management LLC plans a second refinancing of a 2015 CLO transaction.

More than $13 billion of broadly syndicated CLOs have been refinanced year to date, BofA reports.

Meanwhile, U.S. CLOs have held strong and outperformed similarly rated corporate bonds for the fourth consecutive week in the secondary market amid trade-related volatility, according to the report.

Secondary spreads for AAA tranches and the belly of the stack headed out on Friday 3 basis points to 5 bps tighter on the week, the note said.

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