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CLO managers refinance 21 deals in October; AA, A spreads firm; high-grade trading thin
By Cristal Cody
Eureka Springs, Ark., Nov. 1 – October saw 21 CLO deals refinance or reset, according to a Wells Fargo Securities, LLC report on Tuesday.
“Deals that were refinanced in October reduced their weighted average debt costs by a median of 19 [basis points], while deals that were reset increased their weighted average debt costs by 2 bps,” Wells Fargo analysts said in the note.
Market sources expect refinancing action to continue ahead of the Dec. 24 risk retention deadline.
In the secondary market, CLO spreads are mostly unchanged but at 52-week tights over the past month, according to the note.
“Most tranche level U.S. secondary spreads were unchanged with two exceptions: AAA spreads tightened by 4 bps on the month to 138 bps, and single-A spreads tightened 10 bps to 240 bps,” the analyst said. “U.S. primary spreads were unchanged on the month, with the exception of BB spreads, which were slightly wider [by 25 bps].”
The securitized secondary market saw $24.43 million of CBO/CDO/CLO issues and $113.47 million of non-investment-grade securities trade on Monday, according to Trace.
GSO/Blackstone offers CLO
In the primary market, GSO/Blackstone Debt Funds Management LLC plans to price $561,675,000 of notes due April 15, 2029 in the Bristol Park CLO Ltd./Bristol Park CLO LLC transaction, according to a source.
The deal includes $357.5 million of class A floating-rate notes (//AAA); $60.5 million of class B floating-rate notes; $33 million of class C floating-rate notes; $33 million of class D floating-rate notes; $23,375,0000 of class E floating-rate notes and $54.3 million of subordinated notes.
BNP Paribas Securities Corp. is the placement agent.
GSO/Blackstone has priced three new U.S. CLOs and refinanced one vintage CLO year to date.
The New York City-based firm is a subsidiary of alternative asset manager GSO Capital Partners LP.
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