AXA prices $556.93 million CLO; Five Arrows, Alcentra offer euro CLOs; supply thins

By Cristal Cody

Tupelo, Miss., Oct. 22 – CLO spreads are improving on overall lighter-than-expected fall volume, while deal action remains steady in October.

AXA Investment Managers, Inc. priced a new $556.93 million CLO deal that closes at the end of the month.

In the European primary market, Five Arrows Managers LLP is offering a €412 million CLO, while Alcentra Ltd. is marketing a €411.1 million CLO.

U.S. deal volume year to date has surpassed $100 billion, BofA Merrill Lynch analysts said in a note released on Monday.

While equities sold off and high-yield spreads widened, the “loan market and CLO market have remained immune,” Wells Fargo Securities LLC analysts said in a note on Monday.

CLO BBB and BB spreads have tightened 10 basis points to 15 bps since the end of September, while AAA spreads have been roughly flat, the note said.

CLO BBB spreads have firmed to Libor plus 315 bps from the Libor plus 305 bps area, while BB spreads have tightened to the Libor plus 595 bps area from the 610 bps area in September.

The CLO primary market remains active with more than $5 billion of issuance month to date, but volume is lower than prior months with a trailing six-month average of $11.9 billion per month, according to the note.

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