Gulf Stream prices $281.95 million CLO; non-high-grade paper gains; loan outflows down

By Cristal Cody

Tupelo, Miss., May 15 – Gulf Stream Asset Management LLC priced $281.95 million of notes in the manager’s second CLO offering of the year.

The market is slowly reopening since volume stopped after the pandemic was announced in March.

Downgrades of corporate issuers have weighed on portfolio quality of U.S. broadly syndicated loan CLOs under Fitch Ratings’ surveillance, Fitch said in a report on Friday.

“This can be seen in the weighted average rating factor levels, which have weakened (increased) to an average 36.7 in April, up from 34.5 just one month earlier,” Fitch said.

Meanwhile, leveraged loan funds had fewer outflows for the past week ended Wednesday, according to Fitch.

Outflows totaled $330.2 million, down from $484.8 million of redemptions in the prior week.

Looking at the securitized secondary market, prices improved and trading volume rose in tranches further down the capital stack on Thursday.

Trading volume increased to $252.35 million for non-high-grade CBO/CDO/CLO issues from $177.99 million on Wednesday, $197.61 million on Tuesday and $227.45 million on Monday, Trace data shows.

The lower-rated securities traded at an average 71.30 on Thursday, stronger than where the issues averaged 69.50 on Wednesday, 69.90 on Tuesday and 63.30 on Monday.

Secondary market volume in investment-grade CBO/CDO/CLO paper totaled $517.8 million on Thursday, compared to $605.7 million on Wednesday, $509.75 million on Tuesday and $469.34 million on Monday, according to Trace data.

High-grade tranches softened to an average 91.20 on Thursday from 94.30 on Wednesday and 93.10 on Tuesday, while flat from Monday’s average of 91.20.

Gulf Stream 2 CLO prices

Gulf Stream Asset Management priced $281.95 million of notes due Oct. 15, 2029 in the transaction, according to market sources.

Gulf Stream Meridian 2 Ltd. sold $160 million of class A-1a floating-rate notes at Libor plus 220 basis points at the top of the capital structure.

J.P. Morgan Securities LLC was the placement agent.

The deal is backed primarily by broadly syndicated senior secured corporate loans.

Gulf Stream Asset Management is an investment management firm based in New York.

© 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.