Prudential, Sound Point refinance vintage CLOs; Oaktree on tap; U.S. March supply thin

By Cristal Cody

Tupelo, Miss., March 15 – CLO refinancing action is gaining steam after a quiet start to the year.

Prudential Investment Management, Inc. sold $939.95 million of notes in a second refinancing of a vintage 2014 CLO deal that closed on Friday.

Sound Point Capital Management LP priced $644 million of notes in a refinancing of a vintage 2016 CLO.

About $5 billion of vintage CLOs have been refinanced year to date, according to market sources. Reprint volume is expected by market analysts to decline substantially in 2019. BofA Merrill Lynch cut its yearly refinancing forecast by 45% in January to about $55 billion of expected issuance.

Meanwhile, Oaktree Capital Management LP plans to price a $732.2 million CLO in the manager’s first new issuance of the year.

Dollar-denominated primary supply has thinned in March, though the market faces a heavy pipeline of potential issuers, according to a Wells Fargo Securities, LLC research report on Friday.

“March U.S. CLO primary volume has been on the lighter side thus far, with only $3.3 billion issued so far – a drop from February’s $13 billion,” Wells Fargo senior analyst Dave Preston and associate analyst Mackenzie Miller said.

March volume through Thursday is down from the $4.8 billion of CLOs priced in the same period in 2018, according to the report.

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