August CLO activity remains thin; ‘softer tone’ to loan market may support CLO primary

By Cristal Cody

Tupelo, Miss., Aug. 14 – CLO market activity is expected to ramp up in early fall while volume remains light in August, according to market sources on Friday.

The “CLO primary market has been mired in the August doldrums, nearly ‘as idle as a painted ship upon a painted ocean,’” Wells Fargo Securities, LLC senior analyst Dave Preston and associate analyst Mackenzie Miller said in a note on Friday.

CLO managers including Loomis, Sayles & Co., LP, American Capital CLO Management, LLC, Resource Capital Corp., Oaktree Capital Management LP and Oak Hill Advisors LP have priced more than $2.3 billion of deals over the first two weeks of the month, according to market sources.

Loan prices continued to slide over the week and a “softer tone in the loan market may help CLO issuance,” the Wells Fargo analysts said. “On the other hand, loan supply is limited relative to CLO formation, leaving CLO managers looking to ramp portfolios amid light loan supply.”

Coming up in new issuance, Alcentra NY LLC is expected to price the $514.45 million Shackleton 2015-VIII CLO, Ltd./Shackleton 2015-VIII CLO, LLC transaction via J.P. Morgan Securities 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.