Anchorage Capital Group offers $405.8 million broadly syndicated CLO; AAAs cheapen

By Cristal Cody

Tupelo, Miss., Jan. 17 – The new issue CLO market is starting to wake from the holiday slumber with reports of new deals being marketed, as well as more refinancing transactions.

Anchorage Capital Group, LLC plans to issue $405.8 million of notes in a new broadly syndicated CLO deal set to close in February.

The Anchorage Credit Opportunities CLO 1, Ltd./Anchorage Credit Opportunities CLO 1, LLC deal includes $220 million of class A-1 floating-rate notes (AAA/AAA) and $5 million of class A-2 fixed-rate notes (/non-rated/AAA) at the top of the capital stack.

New issue CLO spreads are appearing to cheapen and are cheap compared to the rest of the CLO capital stack and competing assets, Wells Fargo Securities, LLC analysts said in a research note on Friday.

“We think CLO AAAs are poised to tighten due to the loan market rally,” the analysts said. “Additionally, the current CLO term curve points to primary CLO AAAs as cheap, due to a wider basis between shorter and longer deals.”

Currently, primary AAAs are at five-year wides compared to investment-grade corporate bonds, according to the note.

Primary AAA spreads were quoted at Libor plus 128 bps, while BB tranches were quoted at Libor plus 650 bps.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.