Zais prices $410.3 million CLO; Partners sells €413.9 million notes; CLO spreads soften

By Cristal Cody

Tupelo, Miss., Nov. 26 – CLO managers tapped the U.S. and European primary markets with new issues.

Zais Group, LLC priced a $410.3 million CLO offering in its second deal of the year.

In the European space, Partners Group (UK) Management Ltd. priced €413.9 million of notes in its second new CLO transaction of 2018.

Year to date, more than $100 billion of dollar-denominated CLOs and more than €24 billion of euro-denominated CLOs have priced, according to market sources.

In the third quarter, CLO volume declined slightly to 97 deals from 106 transactions in the second quarter, Moody’s Investors Service said in its November CLO market report on Monday. The third-quarter transactions included 45 new issue deals, 43 CLO resets and nine CLO re-issuances, according to the report.

“Refinancings remained steady, with 16 deals in Q3, compared to 15 in Q2,” Moody’s said.

New issue spreads have widened over the year.

“Continuing the late Q2 trend, new-issuance weighted-average Aaa spreads widened further in Q3,” Moody’s said. “Starting at around 110 basis points in July, Aaa spreads increased to approximately 115 bps by the end of September.”

Zais priced its AAA-rated tranche 15 bps wider than where its first deal of the year was issued in July.

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