June CLO issuance jumps; CIFC, Och-Ziff, Cerberus tap market; Covenant Credit plans CLO

By Cristal Cody

Tupelo, Miss., June 17 – More than $8 billion of CLOs have priced in June following new deals from Och-Ziff Loan Management, LP, CIFC Asset Management LLC and Cerberus Capital Management, LP, according to market sources.

“The average new-issue CLO size by month has increased by $125 [million] since February to $627 [million] in June, while AAA spreads have continued to tighten, which suggests improving demand technicals at the top of the structure,” J.P. Morgan Securities LLC analysts said in a note.

Och-Ziff Loan Management sold an upsized $824.75 million CLO and placed the AAA tranche at Libor plus 142 basis points, according to a market source.

CIFC Asset Management brought an upsized $723.15 million transaction, a market source said. The firm placed the CLO’s AAA notes at Libor plus 149 bps.

In the middle market, Cerberus Capital Management priced a $145 million short-dated CLO offering of loans, according to a source. The CLO priced two tranches of triple A-rated loans at Libor plus 250 bps and Libor plus 200 bps.

Meanwhile, Covenant Credit Partners LLC plans to price $527.5 million of notes in the firm’s first CLO deal, according to a market source.

The platform is a partnership between Covenant Credit Partners and Livermore Investments Group Ltd. “with the aim to manage CLOs and new loan funds in the future,” according to Livermore’s fiscal 2013 annual report.

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