AB Private Credit Investors prices second CLO to date; secondary picks up; spreads flat

By Cristal Cody

Tupelo, Miss., June 12 – AB Private Credit Investors LLC priced $348.9 million of notes in the middle-market CLO manager’s first CLO offering of 2017 and second deal to date.

Middle-market CLO volume year to date totals nearly $7 billion, according to a BofA Merrill Lynch research report released on Monday.

More than $33 billion of new broadly syndicated CLOs have priced year to date, while nearly $84 billion have been refinanced.

CLO secondary market activity was stronger over the past week, according to the BofA Merrill Lynch note.

“BWIC volume totaled $312 [million] which represents a 37% [week over week] increase but is still relatively low compared to average levels historically,” BofA Merrill Lynch analysts said in the note.

The market focused more on the mezzanine part of the capital stack with 78% of the bids for BB and B tranches, the analysts said.

“While some money managers are monetizing what has been a great run for mezz CLO 2.0s, many hedge funds are seeking seasoned mezzanine paper,” the analysts said.

CLO spreads overall were unchanged on the week with AAAs on Friday at Libor plus 115 basis points and B-rated spreads unchanged at Libor plus 775 bps.

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