Palmer Square sells $435.8 million CLO; KKR taps market; CIFC in pipeline; arbs ‘squeezed’

By Cristal Cody

Tupelo, Miss., April 10 – New CLO issuance on Friday included a $436 million deal from Palmer Square Capital Management LLC, according to market sources.

KKR Asset Management, LLC also priced a $564 million CLO offering via Credit Suisse Securities (USA) LLC, a source said. Final pricing details on the KKR deal were not available by press time.

Looking ahead, CIFC Asset Management LLC plans to price a $513 million CLO transaction, the firm’s second offering of the year, according to a market source.

Global CLO issuance remains strong year to date with more than $35 billion of deals priced, Prospect News data shows.

“It’s been pretty active, but it’s slowing down,” one source said on Friday. “A lot of tier one managers are in the market at this stage of the game. Spreads definitely seem to be heading tighter as the loan market remains pretty technical given the lack of supply – that’s causing the liability structure in the CLO space to price tighter. The arbs are getting pretty squeezed.”

Palmer Square prices CLO

Palmer Square Capital Management priced $435.8 million of notes due May 21, 2027 in the Palmer Square CLO 2015-1, Ltd. offering, a market source said.

Palmer Square CLO 2015-1 sold $263.8 million of class A-1 senior secured floating-rate notes at Libor plus 150 basis points in the senior tranche.

J.P. Morgan Securities, LLC was the placement agent.

Palmer Square Capital Management LLC is the CLO manager.

The CLO is non-callable until May 21, 2017. The reinvestment period ends May 21, 2019.

The notes are collateralized primarily by broadly syndicated first-lien senior secured corporate loans.

Palmer Square Capital Management brought two CLO deals in 2014.

The investment management firm is based in Leawood, Kan.

CIFC offers $513 million

CIFC Asset Management plans to price $513 million of notes in the CIFC Funding 2015-II, Ltd./CIFC Funding 2015-II, LLC CLO transaction, according to a market source.

Barclays is the placement agent.

CIFC Asset Management will manage the CLO.

The CLO manager priced $614.2 million of notes in the CIFC Funding 2015-I, Ltd./CIFC Funding 2015-I, LLC deal on Feb. 20.

CIFC Asset Management refinanced $290.3 million of notes in the CIFC Funding 2011-I, Ltd./CIFC Funding 2011-I, LLC transaction on Jan. 9.

The firm priced four CLO deals in 2014.

New York City-based CIFC Asset Management is a subsidiary of CIFC Corp.

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