New CLO deals in pipeline from MJX, CIFC, DFG, Highbridge firm; secondary volume thin

By Cristal Cody

Tupelo, Miss., July 31 - New CLO transactions are coming up in the pipeline, though Wednesday stayed quiet as issuers stayed on the sidelines while the Federal Reserve wrapped up a two-day policy meeting, sources said.

"If nothing prices today, this will be the lowest monthly volume issuance since July of last year," one source said.

"Pretty slow day," another market source said.

The August deal pipeline is expected to include new CLOs from MJX Asset Management LLC, CIFC Asset Management LLC, DFG Investment Advisers, Inc. and Highbridge Principal Strategies, LLC, among others.

The summer lull in issuance has not helped CLOs, a source said.

"Spreads are relatively too wide at the top part of the capital structure to create attractive equity yields and loan spreads are beginning to tighten a little bit again after widening out from the volatility in June," the source said. "All of that combined has created more difficult conditions in the CLO market."

Triple A-rated CLO notes are pricing in the area of Libor plus 135 basis points, while BB-rated tranches are printing at Libor plus 625 bps to 650 bps.

BBB-notes are coming at Libor plus 425 bps to 450 bps.

Equity yields are inside of 8% on the bottom part of the structure.

Secondary CLO trading remains light.

"Not a lot of volume," a source said. "It's been pretty quiet."

MJX plans $500 million CLO

MJX Asset Management plans to price a $500 million collateralized loan obligation offering via Morgan Stanley & Co. LLC in early August, according to an informed source.

The New York City-based firm last priced a CLO in March when it sold $600 million in the Venture XIII CLO Ltd. deal.

MJX currently manages 12 CDO funds, including four CLOs that include Venture X CLO Ltd., Venture XI CLO Ltd. and Venture XII CLO Ltd.

CIFC to sell $400 million

CIFC Asset Management is in the August deal pipeline with the $400 million CIFC 2013-III, Ltd. CLO, according to an informed source.

Citigroup Global Markets Inc. is the placement agent.

CLO manager CIFC is a subsidiary of New York-based CIFC Corp.

The asset manager was in the CLO primary market earlier this year with the $516.6 million CIFC Funding 2013-I, Ltd. deal that closed in March and the $649.65 million CIFC Funding 2013-II, Ltd. offering that settled in May.

Highbridge to offer CLO

Highbridge Principal Strategies is prepping a $400 million offering to price in August, according to a market source.

Citigroup Global Markets is the underwriter.

The New York-based investment management firm priced its first CLO when it sold the $313 million Highbridge Loan Management 2012-1 Ltd. offering in September.

DFG preps for CLO offering

Also in the weeks ahead, DFG Investment Advisers plans to bring a CLO offering, a market source said.

Deutsche Bank Securities Inc. is the underwriter.

The New York-based money manager sold its first CLO, the $317 million Vibrant CLO, Ltd., in December.

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