New Sound Point CLO pricing emerges; Q2 issuance lags year ago pace; volume up for year

By Rebecca Melvin

New York, June 29 – Pricing emerged on another CLO deal on Monday even as slowing primary activity is anticipated during the holiday-shortened week in which the second quarter ends.

Markets are closed on Friday in observance of U.S. Independence Day.

Sound Point Capital Management LP priced a $515.5 million CLO transaction in nine tranches maturing in 2027, according to market sources.

Sound Point Capital sold the Sound Point CLO IX, Ltd./Sound Point CLO IX Inc. with $325 million of class A senior secured floating-rate notes (Aaa) at Libor plus 152 basis points, which was a basis point tighter compared to its previous CLO transaction that priced in March.

BofA Merrill Lynch arranged the deal.

For the second quarter overall, the pace of new issuance slowed. Issuance was $40.1 billion in 74 deals for the second quarter of 2015, compared to $45.5 billion in 78 deals for the second quarter of 2014, according to Prospect News data.

For the year to date, issuance still outpaces 2014’s pace, with $76.6 billion so far this year, compared to $71.2 billion for the first half of last year, according to the data.

For the upcoming third quarter, an uptick of issuance is expected as the market resets and a backlog of deals that were originally slated to price in the second quarter cycle through, according to Wells Fargo Securities’ Q3 2015 CLO Market Outlook report.

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