Ares plans €410.2 million CLO; new U.S. volume, reset supply thin; outflows continue

By Cristal Cody

Tupelo, Miss., Feb. 22 – Ares European Loan Management LLP is expected price a €410.2 million CLO as the primary market continues to pick up steam.

Several European CLOs have priced in February, while others are in the deal pipeline.

U.S. CLO supply also is active but softer compared to the same period last year.

“New CLO issuance picked up in February compared with January, but YTD volumes are well under last year’s levels,” Fitch Ratings said in a report on Friday. “Seventeen BSL CLOs priced in February, following 10 in January. This compares with an unusually high January 2018 when 13 BSL CLOs priced followed by 25 more in February 2018.”

CLO spreads have continued to widen this year with new senior spreads averaging at Libor plus 127 basis points, compared with Libor plus 121 bps for CLOs that were issued in December, according to the report.

“Resets are also thin so far this year,” Fitch said.

In other market activity, outflows from leveraged loans worsened to $770 million for the week ended Feb. 20 after losing $460 million in redemptions a week earlier, according to a BofA Merrill Lynch report released on Friday.

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