KKR prices $499.2 million CLO; Sound Point, Madison reprice; mezzanine spreads soften

By Cristal Cody

Tupelo, Miss., July 22 – The broadly syndicated and middle-market CLO markets continue to remain active in July with new issuance and refinancing transactions.

KKR Financial Advisors II, LLC priced $499.2 million of notes in the CLO manager’s third new broadly syndicated CLO transaction this year.

More than $65 billion of new broadly syndicated and middle-market CLOs have priced year to date following four new deals brought to the market last week, according to a BofA research note released on Monday.

New issue AAAs are printing in the Libor plus 131 basis points to Libor plus 137 bps range, according to the report.

In refinancing activity, Sound Point Capital Management LP priced $470 million of notes in a second reprint of a 2015 broadly syndicated CLO.

Madison Capital Funding LLC also priced $302.85 million of notes in a refinancing of a vintage 2017 middle-market CLO.

Meanwhile, the CLO secondary market saw an uptick in activity last week.

BWIC volume rose about 20% on the week to just under $700 million, according to the BofA report.

AAA-rated spreads were flat on the week on average at the Libor plus 115 bps area. BB-rated tranches softened 20 bps on the week to head out on Friday at the Libor plus 700 bps range.

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