Oaktree, Highbridge price CLOs; volume to date hits $4.25 billion; spreads tighten

By Cristal Cody

Eureka Springs, Ark., March 14 – Details emerged on new issuance brought by Oaktree Capital Management LP and Highbridge Principal Strategies LLC in the U.S. CLO market.

Oaktree Capital Management priced $470 million of notes in the Oaktree EIF I Series A Ltd./Oaktree EIF I Series A LLC transaction.

Highbridge Principal Strategies tapped the primary market with a $406.75 million CLO deal.

The deals bring year-to-date issuance to $4.25 billion, according to market sources.

In the secondary market, BWIC volume rose to $406 million over the previous week, according to a BofA Merrill Lynch note.

“Activity was heavily concentrated in the mezzanine part of the capital structure,” BofA Merrill Lynch analysts said in the note. “CLO 2.0/3.0 BBs were particularly active as hedge-fund buying activity picked up following the improvement in loans trends in recent weeks and the ECB’s decision to provide further easing on Thursday.”

CLO 2.0 spreads tightened across the capital stack, the analysts said. AAA notes firmed 5 basis points over the previous week to Libor plus 185 bps, while BBB notes tightened 25 bps to Libor plus 375 bps and BB-rated notes came in 75 bps to Libor plus 1,125 bps.

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