CLO primary reopens; Neuberger Berman prices $602 million deal; CLO refinancings resume

By Cristal Cody

Tupelo, Miss., Feb. 4 – Neuberger Berman Loan Advisers LLC priced $602 million of notes in a new broadly syndicated CLO as the primary market begins to show more signs of activity in the new year.

Several issuers priced transactions in late January after volatility in December sent spreads wider and kept issuers at bay for most of the month.

Neuberger priced its AAA-rated tranche of notes at Libor plus 133 basis points.

PPM Loan Management Co., LLC was in the primary market last week as previously reported with a $405.6 million CLO deal via Goldman Sachs & Co. LLC.

PPM CLO 2, Ltd. priced its $256 million tranche of class A loans at Libor plus 150 bps.

New issue weighted average spreads are “coming in a range of 133-150 [bps],” according to a BofA Merrill Lynch analyst research note released on Monday.

“Enduring market scrutiny on leveraged loan fundamentals, and consequently CLOs, continued to contribute to pronounced manager tiering in the primary market, in particular pressuring debt costs for new managers with limited performance history,” the analysts said.

CLO refinancings also are beginning to resume albeit at a slow pace with three vintage CLOs refinanced in January, compared to the 29 deals this same time last year, according to the report.

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