U.S., Europe CLO primary action remains quiet in January; U.S. deal volume in 2016 thins

By Cristal Cody

Tupelo, Miss., Jan. 27 – CLO primary action remains quiet with light issuance expected over the rest of the month in the U.S. and European markets.

Prudential Investment Management, Inc. is in the pipeline with a $507.75 million CLO offering via BNP Paribas Securities Corp.

The Dryden 42 Senior Loan Fund/Dryden 42 Senior Loan Fund LLC transaction includes $310 million of class A floating-rate notes (AAA); $60 million of class B floating-rate notes (AA); $37.5 million of class C deferrable floating-rate notes (A); $27.5 million of class D deferrable floating-rate notes (BBB); $24 million of class E deferrable floating-rate notes (BB) and $48.75 million of subordinated notes.

Prudential Financial Inc. subsidiary PGIM Inc. will manage the CLO.

Three U.S. CLO deals have priced to date in 2016, while one European CLO transaction has printed in January, according to informed sources.

Market sources expect U.S. volume to drop to $60 billion to $80 billion in front of risk retention regulations that take effect in December. More than $90 billion of broadly syndicated CLOs priced in the U.S. market in 2015, according to Prospect News data and market sources.

About €15 billion of euro-denominated CLO issuance is forecast by market analysts in 2016. The forecast is slightly up from the €13.5 billion of euro-denominated CLO deals priced in 2015, according to Prospect News data and market sources.

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