Octagon Credit, CBAM, Napier Park price CLOs; heavy July supply weighs on spreads

By Cristal Cody

Tupelo, Miss., July 16 – CLO issuance remains solid with several new deals pricing in July, according to market sources on Monday.

Octagon Credit Investors, LLC brought a $664 million CLO to the primary market on Thursday.

Octagon Credit Investors sold the notes due July 20, 2030 in the Octagon Investment Partners 38, Ltd./Octagon Investment Partners 38, LLC transaction on Thursday, according to a market source.

Meanwhile, CBAM CLO Management LLC closed Thursday on a new $756 million CLO.

Also, Napier Park Global Capital (US) LP priced $602.1 million of notes in a new deal.

CLO refinancing and reset activity also has been strong, sources report.

The “heavy July supply calendar” weighed on spreads last week, while other securities tightened, according to a BofA Merrill Lynch note released on Monday.

After a soft first half of the year for corporate credit spreads, “buyers have the upper hand when it comes to gaining spread concessions on new issues/refis/resets, which could see another $25-$30 billion in July,” BofA Merrill Lynch analysts said in the note. “This naturally will spill over to the secondary market.”

AAA spreads ended Friday at the Libor plus 112 basis points area, about 2 bps wider on the week.

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