CLO primary thin; Prudential prices $512.2 million: Benefit refinances $415.3 million

By Cristal Cody

Tupelo, Miss., Sept. 21 – Details emerged on a new CLO deal from Prudential Investment Management, Inc., while September CLO primary action overall remains light.

“Primary is expected to be slow in September, for the third consecutive month, and should be down in 2H15 from 1H15, which saw $61 [billion],” J.P. Morgan Securities LLC analysts said in a note. “With only 2.5 months to go before Thanksgiving, the next couple of months are going to have to pick up for CLO supply to reach our $100-$110 [billion] forecast.”

In refinancing activity, Benefit Street Partners LLC refinanced $415.3 million of notes in a vintage 2012 CLO deal.

CLO issuance this year to date totals about $84.5 billion of volume, including broadly syndicated deals, refinancings and middle-market issuance, according to data compiled by Prospect News.

In the U.S. CLO secondary market, BWIC volumes totaled more than $800 million in the previous week with trading concentrated in AAA paper, BofA Merrill Lynch analysts said in a note.

About €140 million of European CLO bonds concentrated in vintage 1.0 mezzanine bonds appeared on BWIC lists over the past week, the analysts said.

“Trading levels appeared slightly softer than in recent weeks, potentially explained by the reduced liquidity with so many market participants away from their desks,” BofA Merrill Lynch analysts said.

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