CLO volume remains light; deal pipeline slows in August; BlueMountain deal underway

By Cristal Cody

Tupelo, Miss., Aug. 20 – August CLO deal activity remains thin, though some issuance is expected before the month is finished, according to market sources on Thursday.

Volume is forecast to stay at a trickle until September.

Coming up, BlueMountain Capital Management LLC plans to price $407.25 million of notes in the BlueMountain CLO 2015-3 Ltd./BlueMountain CLO 2015-3 LLC deal via Credit Suisse Securities (USA) LLC.

More than $79 billion of U.S. CLOs have priced year to date, according to data compiled by Prospect News.

Market analysts forecast as much as $100 billion of U.S. issuance in 2015.

Some CLO market participants have turned their focus to the high-yield space, finding “opportunities elsewhere,” as one source said on Thursday.

A market source said earlier in the week that risk premium spreads for CLOs have widened in the wake of the junk bond market sell-off over the last few weeks, making CLO issuance less attractive.

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