PGIM brings $410.4 million CLO; euro spreads firm; secondary prices show improvement

By Cristal Cody

Tupelo, Miss., Nov. 8 – PGIM, Inc. sold $410.4 million of notes in the manager’s newest CLO priced in November.

About $100 billion of dollar-denominated broadly syndicated CLOs have priced year to date, according to market sources.

The European CLO market, which remains active in new issuance and refinancings in November, saw senior spreads tighten for the first time in more than a year.

Fitch Ratings said in a report on Friday that senior spreads on new European CLOs improved for the first time since the start of 2018 with AAA spreads averaging 105.9 basis points over Euribor in the third quarter versus an average of 111.3 bps in the second quarter of the year.

Euro-denominated AAA spreads on CLOs priced in the second half of September declined further to average 92.8 bps, Fitch said.

Elsewhere, securitized secondary market volume and average trading prices improved in the previous session.

On Thursday, $474.68 million of investment-grade CBO/CDO/CLO issues traded at an average 97.50 price, according to Trace data. The session saw $231.99 million of non-high-grade paper trade at an average 89.00 price.

On Wednesday, $341.45 million of high-grade CBO/CDO/CLO issues and $111.06 million of lower-rated CBO/CDO/CLO securities traded.

Average trading prices for the high-grade securities was 97.00 on Wednesday, while the non-high-grade CBO/CDO/CLO issues traded at an average 76.30 price.

In other market activity, outflows from leveraged loan funds fell to $140 million for the past week ended Wednesday from $400 million in the previous week, according to a BofA Merrill Lynch research note released Friday.

Dryden 80 prints

PGIM priced $410.4 million of notes due Jan. 17, 2033 in the Dryden 80 CLO, Ltd./Dryden 80 CLO, LLC deal, according to market sources.

The $246.25 million tranche of class A-1 floating-rate notes priced at Libor plus 133 bps.

BofA Securities, Inc. was the placement agent.

The deal is backed primarily by broadly syndicated first-lien senior secured loans.

The investment management firm is a subsidiary of Newark, N.J.-based Prudential Financial Inc.

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