CLO deal pipeline mostly quiet; Prudential on calendar with six-tranche CLO; AAAs widen

By Cristal Cody

Tupelo, Miss. Feb. 3 – CLO volume is expected to stay pressured over the near term with February deal action quiet and after January clocked in with the lowest supply in four years, sources report.

CLO managers have priced $826 million of U.S. broadly syndicated CLOs and €414 million of euro-denominated CLOs year to date.

Prudential Investment Management, Inc. is in the pipeline with a $507.75 million transaction via BNP Paribas Securities Corp.

The Dryden 42 Senior Loan Fund/Dryden 42 Senior Loan Fund LLC transaction includes six tranches of notes.

Secondary market action has picked up but spreads have drifted wider over the last couple of weeks, according to market sources.

Both 2.0 and 3.0 CLO AAA-rated notes have softened in secondary trading. CLO 2.0 AAAs weakened 5 basis points to 10 bps as February opened, while 3.0 AAA notes eased 2 bps, according to market sources.

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