Fortress prices new $563 million CLO; secondary market volume thins, spreads unchanged

By Cristal Cody

Tupelo, Miss., Oct. 30 – New CLO deal volume totals more than $91 billion year to date following issuance in late October, according to market sources on Monday.

Fortress Investment Group LLC affiliate FC BSL Management LLC Series IV priced a new $563 million broadly syndicated CLO.

While primary and refinancing activity has been steady in October, secondary market action has been light.

BWIC volume was less than $240 million over the past week, a 17% decline from the previous week, BofA Merrill Lynch analysts said in a note released on Monday.

“Interestingly, there were hardly any senior bonds up for bid,” the analysts said. “Instead, we saw over $100 [million] worth of BBB bonds, $39 [million] worth of BB bonds and $30 [million] worth of single-B bonds appear on lists. Sentiment among investors remains optimistic and the mezz selling we saw likely in part reflects profit-taking before YE.”

CLO spreads were mostly flat across the capital structure with AAAs at Libor plus 110 basis points on Friday, according to the note.

FC BSL Management LLC Series IV sold $563 million of notes due Oct. 26, 2029 in the new CLO transaction, according to market sources.

Fortress Credit BSL IV Ltd. priced $326.7 million of class A senior secured floating-rate notes at a discount margin of Libor plus basis 124 bps in the senior tranche.

MUFG was the placement agent.

Fortress Investment is a New York City-based investment firm.

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