Palmer Square prices $401.1 million CLO; Cerberus sells middle-market CLO

By Cristal Cody

Tupelo, Miss., Nov. 20 – Palmer Square Capital Management LLC priced $401.1 million of notes in the manager’s seventh new dollar-denominated broadly syndicated CLO offering of the year.

In other new supply, Cerberus Capital Management, LP priced a $352.18 million middle-market CLO in the manager’s third deal year to date.

More than $70 billion of dollar-denominated broadly syndicated CLOs about $8 billion of middle-market CLOs have priced in 2020, according to market sources.

Meanwhile, secondary supply this week has been strong.

The week started out with $324.98 million of investment-grade CBO/CDO/CLO notes and $174.14 million of lower-rated paper traded, according to Trace data.

High-grade tranches averaged 98.30, while the non-investment-grade notes averaged 83.50 on Monday.

Secondary volume on Tuesday included $756.72 million of high-grade CBO/CDO/CLO notes traded at an average 98.70 and $326.86 million of lower-rated issues traded at a 77.20 average.

On Wednesday, $646.89 million of high-grade paper and $294.06 million of lower-rated tranches were traded.

The high-grade CBO/CDO/CLO securities traded at an average 98.40, while non-investment-grade issues traded at a 77.90 average.

On Thursday, secondary market volume included $542.34 million of high-grade CBO/CDO/CLO notes and $441.27 million of lower-rated tranches.

The high-grade paper traded at an average 98.50, while non-investment-grade issues averaged 79.50.

Leveraged loan outflows

Elsewhere, leveraged loan funds saw $9.1 million of outflows for the past week ended Wednesday, a significant change from the $3.6 billion of redemptions in the prior week, according to Fitch Ratings.

This past week had the second smallest outflow of the year behind the $5.9 million in redemptions for the week ended Oct. 7.

Year to date outflows total $24.3 billion.

Palmer Square prints

Palmer Square Capital priced $401.1 million of notes due Nov. 15, 2031 in the new CLO transaction, according to market sources.

Palmer Square CLO 2020-3 Ltd./Palmer Square CLO 2020-3, LLC sold $248 million of class A-1a floating-rate notes at Libor plus 137 basis points at the top of the capital structure.

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

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

Palmer Square Capital is an investment management firm based in Leawood, Kan.

Cerberus prices

Cerberus Capital Management priced $352,175,000 of notes due Jan. 17, 2033 in its middle-market deal, according to a market source.

Cerberus Loan Funding XXX LP sold $182 million of class A senior secured floating-rate notes at Libor plus 185 bps in the AAA-rated tranche.

Wells Fargo Securities, LLC was the placement agent.

Cerberus Business Finance, LLC will manage the CLO.

The CLO is collateralized by small and medium-sized enterprise loans and other assets.

The private equity firm is based in New York.

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