Octagon reissues $510.65 million 2014 CLO; refinancing market active; CLO spreads mixed

By Cristal Cody

Tupelo, Miss., May 13 – CLO refinancing supply is active in May with several vintage deals brought to the market.

Octagon Credit Investors, LLC priced $510.65 million of notes in a reissue of a vintage 2014 CLO offering that closed on Monday.

In the middle-market space, AB Private Credit Investors LLC priced a $400.8 million reset of a 2016 CLO.

Last week, three 2016 vintage CLOs and one 2015 CLO transaction were refinanced, according to a BofA Merrill Lynch research note released on Monday.

Year to date, more than $13 billion of CLOs have been refinanced or reissued, the report said.

Elsewhere in the euro-denominated market, euro CLO AAA spreads are expected to tighten soon, Wells Fargo Securities LLC analysts said in a note on Monday following an industry conference in London last week.

“Most investors looking at both U.S. and euro CLOs currently favor euro CLOs,” the Wells Fargo analysts said. “Just as in the U.S., apparent slowing CLO supply, tighter assets, and a steeper term curve likely point to near term euro CLO AAA tightening.”

Euro CLO AAA spreads ended Friday flat on the week at Euribor plus 100 basis points, while dollar-denominated senior tranches softened 2 bps to the Libor plus 117 bps area, according to the BofA Merrill Lynch report.

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