Palmer Square prints $399.4 million static CLO; secondary busy; ratings downgrades eyed

By Cristal Cody

Tupelo, Miss., April 21 – In new CLO issuance, Palmer Square Capital Management LLC priced $399.4 million of notes in a static transaction.

Meanwhile, the secondary market was active on Monday with $206.14 million of high-grade CBO/CDO/CLO issues and $139.83 million of lower-rated paper traded, Trace data shows.

The investment-grade securities traded at an average price of 88.20 during the session, while the non-high-grade issues traded at an average 69.60.

In other market action, single A CLO tranches have largely been spared from the heavy round of ratings downgrades by Moody’s Investors Service, S&P Global Ratings and Fitch Ratings, Wells Fargo Securities, LLC analysts said in a report on Tuesday.

In its deal, Palmer Square Capital Management priced $399.4 million of notes due April 20, 2028 in the static Palmer Square Loan Funding 2020-2 Ltd./Palmer Square Loan Funding 2020-2, LLC transaction, according to market sources.

The CLO sold $272 million of class A-1 floating-rate notes at Libor plus 100 basis points in the AAA-rated tranche.

Citigroup Global Markets Inc. was the placement agent.

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

Palmer Square Capital is an investment management firm based in Leawood, Kan.

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