CLO primary action thins; risk premium spreads weak; greater volume forecast for September

By Cristal Cody

Tupelo, Miss., Aug. 19 – CLO primary activity in August remains light with thin issuance expected over the rest of the month on the heels of a high-yield bond sell-off, according to market sources on Wednesday.

“There’s been a sell-off in high yield in the last two to three weeks,” one source said. “We’ve seen the market down nearly 4 points. The risk premium spreads [for CLOs] have widened, and it’s not quite as attractive as we’ve seen earlier in the summer.”

The slowdown in primary activity is forecast to continue until after the Labor Day holiday in September, a source said.

More than $79 billion of U.S. CLOs have priced year to date in the broadly syndicated and middle market spaces, according to data compiled by Prospect News.

As much as $100 billion of U.S. CLO volume is forecast for the year.

At least one deal is expected to price in the near-term, according to a market source.

BlueMountain Capital Management LLC is on the calendar with the $407.25 million BlueMountain CLO 2015-3 Ltd./BlueMountain CLO 2015-3 LLC transaction via Credit Suisse Securities (USA) LLC.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.