PGIM, Greywolf refinance vintage 2014 CLO notes; CLO AAAs surpass high-grade, CMBS yields

By Cristal Cody

Tupelo, Miss., April 3 – Two CLO managers came to the primary market to refinance vintage CLO notes on Wednesday.

Prudential Investment Management, Inc. affiliate PGIM, Inc. priced $646.75 million of notes in a second refinancing of a 2014 CLO.

Greywolf Capital Management LP sold $510.55 million of notes in a reissue of a vintage 2014 broadly syndicated offering.

CLO AAA notes now offer more yield than investment-grade corporate bonds and CMBS senior bonds, according to a Wells Fargo Securities, LLC research report on Wednesday.

“New issue CLO AAAs current offer yields over 4%,” Wells Fargo Securities LLC senior analyst Dave Preston and associate analyst Mackenzie Miller said. “While CLO AAA yields have edged close to the yields on IG and Dupers, notably in Q3 2016 and from H2 2017 to Q1 2018, according to our data, this is the first time that CLO yields actually surpassed IG or Duper yields since at least 2012.”

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