Eaton Vance, H.I.G. price CLO deals; market on pace for $120 billion of annual issuance

By Cristal Cody

Tupelo, Miss., July 7 – Two collateralized loan obligation managers priced new CLO deals, bringing year-to-date U.S. issuance to about $63 billion, according to market sources on Monday.

Eaton Vance Management priced a $512.34 million CLO offering of notes and placed the AAA tranche at Libor plus 145 basis points, a source said.

H.I.G. Capital, LLC raised $414.25 million in the WhiteHorse IX Ltd./WhiteHorse IX LLC transaction, according to a market source.

The WhiteHorse IX CLO priced the AAA-rated notes at Libor plus 147 bps.

The year is on pace for $120 billion of total issuance, J.P. Morgan Securities LLC analysts said in a market note.

“CLOs stand out as the bright spot in U.S. securitized products,” the analysts said. “We believe our $100 [billion] gross US CLO supply target will be met, but it could be a pyrrhic victory costing softer spreads in mezzanine and possibly AAA unless the investor market deepens.”

About $10 billion of CLO transactions are in the near-term pipeline with a summer slowdown expected in August, according to market sources.

Eaton Vance Management sold $512.34 million of notes due July 15, 2026 in the CLO deal, according to a market source.

Wells Fargo Securities LLC was the placement agent.

Eaton Vance Management will manage the CLO.

Collateral consists primarily of first-lien senior secured loans.

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