Monroe Capital wraps its first middle-market CLO of year; spreads widen on ‘heavy selling’

By Cristal Cody

Tupelo, Miss., June 10 – Monroe Capital LLC priced $456.34 million of notes at par in its first middle-market CLO offering of the year.

The deal marks the manager’s third CLO completed in the last 15 months, the company said in a news release on Monday.

“Our middle-market CLO business remains a critical component to the broader Monroe platform,” Jeremy VanDerMeid, portfolio manager of Monroe, said in the release. “We continue to see strong demand from investors around the world as our middle-market CLOs offer investors a unique entry point to access the U.S. middle market.”

Middle-market CLO volume year to date totals more than $6 billion, compared to $14 billion priced in all of 2018, according to a BofA Merrill Lynch global research note released on Monday.

Meanwhile, BofA Merrill Lynch analysts reported they have turned “more cautious on U.S. CLO spreads.”

Broadly syndicated CLO spreads ended the past week “meaningfully” wider across the capital structure “on extremely heavy selling in the secondary market, especially at the AAA level,” the analysts said in the report.

Weekly BWIC volume totaled almost $2.1 billion – the highest weekly volume on record for 2.0/3.0 CLOs, the analysts said.

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