Zais prices $409 million CLO; March volume strongest primary issuance on record

By Cristal Cody

Tupelo, Miss., April 14 – New April deal activity includes a $409 million CLO transaction from Zais Group LLC, while volume in March was the strongest on record.

“March represented the largest month of primary issuance in the history of the US CLO market, seeing $15.2 [billion] in new supply,” J.P. Morgan Securities LLC analysts said in a note. “As a resurgent CLO primary bid flows through the loan market, 57.8% of loans are at or above par, up from 45% last week and 2.6% at the beginning of the year. This metric is at a high since July 2014.”

Nearly $33 billion of U.S. CLOs have priced year to date, according to data compiled by Prospect News.

Zais taps market

Zais Group sold $409 million of notes in the Zais CLO 3 Ltd. deal, a market source said.

The CLO priced $256 million of class A-1 floating-rate notes at Libor plus 160 basis points at the top of the capital structure.

The CLO also priced six tranches of notes, including $7 million of class E floating-rate notes at Libor plus 730 bps at the bottom of the capital stack.

Credit Suisse Securities (USA) LLC arranged the offering.

Zais Leveraged Loan Manager 3, LLC will manage the CLO.

Zais Group, a Red Bank, N.J.-based structured credit asset management firm, brought two CLO deals in 2014.

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