Ballyrock, MJX, Canyon, Cerberus sell CLOs; Carlyle resets; secondary spreads stable

By Cristal Cody

Eureka Springs, Ark., Aug. 22 – CLO pricing action remains steady in August, while spreads are mostly unchanged in the secondary market, according to sources on Monday.

New issuance in the broadly syndicated CLO primary market includes deals from Ballyrock Investment Advisors LLC, MJX Asset Management LLC and Canyon CLO Advisors LLC.

In addition, Carlyle Investment Management LLC raised $556.4 million in a reset refinancing transaction of a vintage CLO.

“We expect more refinancings/resets in the coming months after eight were priced since the beginning of June,” J.P. Morgan Securities LLC analysts said in a note. “Because resets would be prohibited for non-risk retention compliant CLOs after the risk retention compliance date, we anticipate more of these to come to market in the coming months.”

Year to date, $2.5 billion of U.S. CLOs have been refinanced, according to the note.

In the middle-market primary space, Cerberus Capital Management, LP priced a $415.7 million deal.

Secondary market activity remained strong, though spreads ended Friday unchanged on the week, according to BofA Merrill Lynch analysts.

U.S. CLO 2.0/3.0 spreads ended Friday flat on the week across the capital stack, according to the note.

AAAs were stable at Libor plus 150 basis points, while BBBs traded unchanged at Libor plus 475 bps.

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