PineBridge partially refinances XXVII CLO; new issue AAAs tighten; secondary spreads flat

By Cristal Cody

Tupelo, Miss., Sept. 14 – CLO pricing and refinancing activity is picking up in September.

PineBridge Investments LLC priced $23.16 million of fixed-rate notes in a partial refinancing of a vintage 2018 CLO.

More than $49 billion of broadly syndicated CLOs have priced year to date, according to market sources.

The refinancing space has seen more than $28 billion of volume so far this year.

About $65 billion to $70 billion of issuance is projected for the year as spreads tighten, BofA Securities, Inc. analysts said in a research note released on Monday.

“Top tier managers are now printing deals around 128 [basis points] for the AAA and this is likely to prompt additional supply,” the analysts said. “The improvement in loan prices also implies some seasoned warehouses can now exit into a CLO structure with managers plugging any value gap in the equity arb from opportunities in the secondary/primary loan market.”

The tightening in primary spreads “appears to be driven by mostly domestic money manager and insurance demand as some of the large Japanese and U.S. banks remain on the sidelines,” the analysts note.

New issue AAAs are more than 10 bps tighter from a week earlier at the Libor plus 127 bps average. New issue BBB spreads have improved 15 bps on the week to an average Libor plus 350 bps.

Meanwhile, BWIC volume declined from $1 billion to $677 million over the past holiday-shortened week with spreads mostly flat, according to the report.

Secondary CLO AAAs ended Friday on average at Libor plus 135 bps, unchanged on the week and about 5 bps tighter from a month ago.

PineBridge refinances fixed-rate notes

PineBridge Investments priced $23.16 million of notes due May 16, 2031 in the partial CLO refinancing, according to market sources.

Galaxy XXVII CLO Ltd./Galaxy XXVII CLO LLC sold $23.16 million of 2.4% class B-2-R senior senior secured fixed-rate notes (Aa2//).

The notes were originally issued as a $23.16 billion tranche on April 17, 2018.

RBC Capital Markets, LLC was the refinancing placement agent.

The CLO is collateralized primarily by broadly syndicated first lien senior secured corporate loans.

PineBridge Investments is an asset management firm based in New York City.

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