Fortress, Onex price new CLOs; Palmer Square markets deal; 3.0 CLOs rally, 2.0’s stable

By Cristal Cody

Eureka Springs, Ark., April 25 – April CLO volume rose to more than $1.5 billion following the issuance of two more deals, according to market sources on Monday.

Fortress Investment Group LLC tapped the primary market with a $633.6 million transaction.

Onex Credit Partners, LLC priced a $501.6 million deal, OCP 2016-11 Ltd./OCP CLO 2016-11 Corp., on Friday via Citigroup Global Markets Inc., a source said. Final pricing details were not available by press time.

Coming up in the primary market, Palmer Square Capital Management LLC is on the calendar with a $200,475,000 CLO deal.

In the secondary market, new 3.0 CLO notes traded stronger over the previous week, according to J.P. Morgan Securities LLC.

“The rally continues at the top of the capital structure with AAA-BBB 3.0 CLO spreads tightening 3-15 [basis points] in spread this week,” J.P. Morgan analysts said. “Further down the stack in BB/Single-Bs, spreads were unchanged as we see less investor participation in secondary as investors are a bit more tentative given the perceived lack of upside at current levels.”

2.0 CLO notes were mostly unchanged over the past week in the secondary market, with AAAs at Libor plus 155 bps and BBs at Libor plus 925 bps, according to BofA Merrill Lynch.

“While volumes were heavily concentrated in CLO 2.0 junior mezzanine tranches last week, CLO 2.0 senior tranches were active this week accounting for just over half of total BWIC volumes,” the BofA Merrill Lynch analysts said.

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