Activity thin to start 2015; CLO primary, secondary market to ramp up later in January

By Cristal Cody

Tupelo, Miss., Jan. 2 – The CLO market ended the first session of the year quietly with most desks still thinly staffed and many investors out for holiday vacations, according to informed sources on Friday.

“Literally, nothing is happening,” a trader said late afternoon. “Didn’t even get a phone call.”

Secondary CLO activity is expected to ramp up in the second week of the year, while primary action is anticipated later in the month, market sources said.

“Monday will be sort of a medium day and then things will really start on Tuesday, but there’s no BWIC [bids wanted in competition] scheduled as yet, so I think the market is going to be relatively cautious until there are some BWICs to test the market,” a trader said. “The first couple BWICs will probably be small.”

Until then, CLO market participants will be “just stepping their toes in,” the source said.

CLO analyst forecasts for 2015 call for much less than the record $161 billion of CLOs brought in 2014 but still predict a healthy deal pipeline at around $100 billion.

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