CLO primary market slows; secondary market active following strong volume in 2019

By Cristal Cody

Tupelo, Miss., Jan. 6 – The CLO primary market remained mostly quiet at the start of the year with overall issuance expected to be lower in 2020.

New issue broadly syndicated CLO volume is expected to total $90 billion for the year, according to a Wells Fargo Securities LLC research note on Monday.

In 2019, $116 billion of new issues priced, down 9% from 2018, Wells Fargo analysts said.

Meanwhile, “2019 secondary supply exceeded prior years,” according to the report.

CLO BWIC supply increased 34% year over year to $36 billion in 2019 from $27 billion in 2018.

In 2019, average monthly BWIC volume was $3 billion versus $2.2 billion in 2018, the Wells Fargo report said.

Secondary trading was stronger on Friday following a light first session of the new year, according to Trace data.

Trading volume included $135.83 million of investment-grade CBO/CDO/CLO paper and $92.19 million of lower-rated securities.

The high-grade issues had an average trading volume of $99.50 on Friday, while the non-investment-grade bonds traded at an average 90.40 price.

In the first session of 2020, $38.34 million of investment-grade CBO/CDO/CLO paper traded at an average 99.60 price.

No reported amount of lower-rated CBO/CDO/CLO securities were traded over Thursday’s session.

© 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.