3i, AXA, BlueMountain price; CIFC refinances; BofA Merrill Lynch raises deal forecast

By Cristal Cody

Eureka Springs, Ark., July 25 – CLO primary action continues to heat up in July with details from two new European CLO offerings and one U.S. vintage CLO refinancing transaction, according to market sources on Monday.

In the euro-denominated primary market, 3i Debt Management Investments Ltd. priced a €451.5 million CLO.

AXA Investment Managers, Inc. tapped the market with a €361 million deal.

In the U.S. primary market, BlueMountain Capital Management LLC priced the $505.55 million BlueMountain CLO 2016-2 Ltd./BlueMountain CLO 2016-2 LLC transaction.

Asset Management LLC refinanced a $298 million vintage 2012 AAA-rated CLO tranche.

The deal pace has picked up so much that BofA Merrill Lynch analysts raised their volume forecast to as much as $60 billion for the year from a revised $45 billion of issuance expected.

“After turning overweight last week across the entire US CLO 3.0 stack down to the mezzanine debt tranches, we revisit our issuance target for the year after $29 [billion] worth of BSL and MM deals having priced year-to-date,” BofA Merrill Lynch analysts said in a note released on Monday. “We believe investors and CLO managers alike will continue to see value in the product given the slow growth and low yield environment which we expect to remain in.”

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