BlackRock prices $500.25 million CLO; new AAA spreads soft; loans see first inflows

By Cristal Cody

Tupelo, Miss., March 1 – BlackRock Financial Management, Inc. sold $500.25 million of notes in the firm’s first CLO deal of the year.

In the deal, Magnetite XXI, Ltd./Magnetite XXI LLC priced $332.5 million of the class A floating-rate notes at Libor plus 128 bps at the top of the capital structure.

Citigroup Global Markets Inc. was the placement agent.

The CLO is collateralized mainly by first-lien senior secured loans.

More than $15 billion of dollar-denominated CLOs and over €2 billion of European CLOs have priced year to date.

Volume has picked up but new issuance is being hampered by wider spreads in 2019, Fitch Ratings said in a report on Friday following an industry conference earlier in the week.

Fitch notes that nearly all AAA-rated new issue and refinanced broadly syndicated CLOs have priced above Libor plus 130 basis points in February, up from the Libor plus 121 bps average for CLOs priced in December.

In other market action, leveraged loans saw the first inflow since the week ended Nov. 14, Yuri Seliger, an analyst with BofA Merrill Lynch, said in a research report released Friday.

Loans had a small $50 million inflow for the week ended Feb. 27, following a $770 million outflow in the previous week.

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