Palmer Square sells $435.8 million CLO; KKR taps market; CIFC in pipeline; arbs ‘squeezed’

By Cristal Cody

Tupelo, Miss., April 10 – New CLO issuance on Friday included a $436 million deal from Palmer Square Capital Management LLC, according to market sources.

KKR Asset Management, LLC also priced a $564 million CLO offering via Credit Suisse Securities (USA) LLC, a source said. Final pricing details on the KKR deal were not available by press time.

Looking ahead, CIFC Asset Management LLC plans to price a $513 million CLO transaction, the firm’s second offering of the year, according to a market source.

Global CLO issuance remains strong year to date with more than $35 billion of deals priced, Prospect News data shows.

“It’s been pretty active, but it’s slowing down,” one source said on Friday. “A lot of tier one managers are in the market at this stage of the game. Spreads definitely seem to be heading tighter as the loan market remains pretty technical given the lack of supply – that’s causing the liability structure in the CLO space to price tighter. The arbs are getting pretty squeezed.”

Palmer Square Capital Management priced $435.8 million of notes due May 21, 2027 in the Palmer Square CLO 2015-1, Ltd. offering, a market source said.

Palmer Square CLO 2015-1 sold $263.8 million of class A-1 senior secured floating-rate notes at Libor plus 150 basis points in the senior tranche.

J.P. Morgan Securities, LLC was the placement agent.

Palmer Square Capital Management LLC is the CLO manager.

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