Chenavari taps Europe; KKR prices $410.75 million CLO; secondary active; A, BBB notes firm

By Cristal Cody

Eureka Springs, Ark., Aug. 12 – CLO primary action picked up in the U.S. and European markets over the week, according to sources on Friday.

Chenavari Credit Partners LLP priced a €362.8 million euro-denominated deal.

KKR Financial Advisors II, LLC priced $410.75 million in a new CLO transaction.

U.S. CLO volume totals $34.83 billion year to date, according to Prospect News data.

In the euro-denominated market, €10.3 billion of CLOs have priced year to date.

“Six deals have priced thus far in August, one of which was a middle-market CLO,” Wells Fargo Securities, LLC analysts said in a note on Friday.

Secondary market activity continues to remain strong in August.

“In secondary, the market saw nearly $1 billion in Bid Wanted In Competition volume this week,” the Wells Fargo analysts said.

“Since early July, secondary single-A and BBB spreads have tightened 50 [basis points]-60 bps,” the analysts said. “The top and the bottom of the stack have been the slowest to tighten; AAA spreads are gradually grinding tighter, but are only 5-8 bps tighter since early July. BB spreads have proven the most resistant to the rally. Spreads are approximately 75-100 bps tighter since early July – but much of tightening was in the two weeks after the Brexit vote.”

CLO 2.0 AAA-rated tranches traded 5 bps better from a month ago at Libor plus 145 bps, according to a separate Wells Fargo Securities report.

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