Western Asset prices $352.3 million CLO; Oaktree closes issue; A-rated spreads soften

By Cristal Cody

Tupelo, Miss., June 19 – Western Asset Management Co. LLC priced a $352.3 million CLO in the firm’s first new issue broadly syndicated deal since 2014.

The manager was last in the primary market in 2018 with a refinancing deal.

In other deal activity, Oaktree Capital Management LP closed Friday on its previously reported $386.4 million Oaktree CLO 2020-1 Ltd./Oaktree CLO 2020-1 LLC offering that priced on May 14. The CLO placed the $244 million of class A floating-rate notes at Libor plus 200 basis points.

More than $28 billion of dollar-denominated CLOs and over €7 billion of European CLOs have priced year to date.

Broadly syndicated CLO AAA primary and secondary spreads were quoted Friday on average at the Libor plus 165 bps area, about 5 bps tighter in new issuance but about 5 bps wider in the secondary market from the start of the week, according to a Wells Fargo Securities, LLC research note.

New issue single A tranches are printing at an average Libor plus 260 bps, while trading at a Libor plus 285 bps average in the secondary market.

CLO A-rated spreads have widened about 10 bps in new issues and about 20 bps in secondary trading from Monday’s levels, according to Wells Fargo.

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