Meridian prices $554.43 million CLO; Greywolf plans second refinancing; CLO AAAs eyed

By Cristal Cody

Tupelo, Miss., Feb. 11 – In new CLO issuance, Meridian Credit Management LLC, doing business as Gulf Stream Asset Management LLC, priced $554.43 million of notes.

Meanwhile, Greywolf Capital Management LP plans to return to the market to price $530.4 million of notes in a second refinancing of a vintage 2014 CLO.

New issue CLO AAA spreads “still appear too wide, compared to loans, to refi CLO AAAs and to competing assets,” Wells Fargo Securities, LLC analysts said in a research note on Monday.

New issue CLO AAAs are printing at an average Libor plus 125 basis points, while AAAs are holding in at the Libor plus 99 bps average in refinancing transactions, according to the report.

“For context, the last time CMBS AAA’s were in the 80 bp context, primary CLO AAA spreads were 112 – 115 bps,” the analysts said of the third quarter of 2018.

In its deal, Meridian Credit Management priced $554.43 million of notes due April 15, 2033 in a new collateralized loan obligation offering, according to market sources.

Gulf Stream Meridian 1 Ltd. sold $352 million of class A-1 floating-rate notes at Libor plus 137 bps at the top of the capital stack.

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

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