Neuberger Berman brings $410.15 million CLO; Marathon prices $461.37 million; AAs widen

By Cristal Cody

Tupelo, Miss., June 22 – Details emerged on new CLOs brought by Neuberger Berman Fixed Income LLC and Marathon Asset Management LP.

Neuberger Berman Fixed Income priced a $410.15 million offering and placed the AAA notes at Libor plus 142 basis points, on the tight side of recent deals. The CLO also priced the AA-rated notes at Libor plus 180 bps, the tightest AA print year to date, according to Wells Fargo Securities LLC.

Marathon Asset Management sold $461.37 million of notes in its transaction and placed the AAA-rated tranche at Libor plus 149 bps.

“U.S. CLO supply stands at $55.4 [billion], which is just $300 [million] off FY 2012,” J.P. Morgan Securities LLC analysts said in a note.

Light deal action is expected over the second half of the year with about $90 billion to $100 billion of total issuance forecast for 2015.

In the secondary market, BWIC volumes exceeded $1.2 billion for the previous week, according to BofA Merrill Lynch.

“U.S. CLO 1.0 AAA notes comprised more than 50% of this total and continued to trade at YTD wides,” BofA Merrill Lynch analysts said in a note.

“We attribute this to some investors wanting to decrease their positions in anticipation of the drop in liquidity ahead of the Volcker compliance deadline of July 21, 2015 when banks would no longer be able to hold non-compliant CLO paper acquired after December 2013 without putting in the necessary capital and adhering to certain limits.”

CLO AAA notes were unchanged at Libor plus 145 bps, on the tight side of spreads year to date, according to the analysts.

AA-rated notes eased 5 bps from the week ended June 13 to Libor plus 195 bps, the analysts said. AA notes have traded as tight as Libor plus 190 bps to as wide as Libor plus 255 bps year to date.

BBB-rated notes, in about 60 bps year to date, widened 20 bps from the previous week to Libor plus 415 bps, according to the note.

Neuberger Berman taps market

Neuberger Berman Fixed Income sold $410.15 million of 12-year notes in the Neuberger Berman CLO XIX, Ltd./Neuberger Berman CLO XIX, LLC transaction, according to a market source.

The CLO priced $254 million of class A-1 floating-rate notes at Libor plus 142 bps in the senior tranche.

BNP Paribas Securities Corp. was the placement agent.

Chicago-based firm Neuberger Berman, of Neuberger Berman Group, LLC, brought three CLOs in 2014.

Marathon prices CLO

Marathon Asset Management sold $461.37 million of notes due July 24, 2028 in a CLO offering via J.P. Morgan Securities LLC, according to a market source.

Marathon CLO VIII Ltd./Marathon CLO VIII LLC priced $120 million of class A-1a senior secured floating-rate notes at Libor plus 149 bps at the top of the capital structure.

The CLO has a two-year non-call period and a five-year reinvestment period.

The deal is backed primarily by broadly syndicated first-lien senior secured corporate loans and eligible investments.

Proceeds from the offering will be used to purchase a portfolio of about $450 million of mostly senior secured leveraged loans.

Marathon Asset Management, a New York City-based global credit manager, brought two CLO transactions in 2014.

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