CLO primary action steady before year closes; Oak Hill prices; secondary trading thins

By Cristal Cody

Tupelo, Miss., Dec. 14 – The CLO primary market is finishing the year strong, while secondary activity has been light in December.

Oak Hill Advisors LP priced the $606 million OHA Credit Partners XII, Ltd./OHA Credit Partners XII LLC transaction and placed the $357 million tranche of class A-1 floating-rate notes at Libor plus 149 basis points, according to a market source.

Goldman Sachs & Co. was the placement agent. Final pricing details for the deal were not available by press time.

“After a slow November ($4.8 billion), December has already seen $3.7 [billion] in new issue U.S. CLO prints as the window to get deals done as year-end fast approaches,” J.P. Morgan Securities, LLC analysts said in a market note. “YTD U.S. CLO issuance has surpassed the 2006 total of $94.0 [billion] and is now second all-time behind the 2014 record of $124.1 [billion].”

Spreads stable

Secondary action over the past week was quiet with about $214 million of notes on BWIC lists and CLO spreads unchanged, according to BofA Merrill Lynch analysts.

“About $119 [million] of 2.0/3.0 investment-grade notes were offered, while 2.0/3.0 double-B and equity tranches comprised about $37 and $11 [million] of the total,” the analysts said in a note.

CLO AAA-rated notes were stable at Libor plus 165 bps. BB-rated notes were unchanged in the Libor plus 825 bps area.

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