Octagon Investment Partners prices CLO; secondary market sees trades clear at wider levels

By Rebecca Melvin

New York, Sept. 29 – Octagon Investment Partners LLC has priced a $762.6 million CLO of floating-rate and subordinated notes that was arranged by Citigroup Global Markets Inc., sources said.

The secondary market for collateralized loan obligations saw some trades on Monday as market players were back in action following last week’s ABS East Conference in Miami and as participants “start finding comfort in wider levels,” a New York-based trader said.

“More lists actually clear at wider levels,” the trader said of bid wanted in competition lists.

Last week’s market action was light, with many market participants away at ABS East. And last week, “BWIC volumes totaled just about $88 million split between the 1.0 and 2.0 deals...,” BofA analysts said in research on securitizations published Friday.

Overall, U.S. spread levels were unchanged last week except for a 10 basis point widening at the double-B and single-B levels in the 2.0/3.0 space, the analysts wrote.

Despite weakness in corporate bonds and credit, securitized products credit held in “reasonably well.”

In the primary market, the new issuance pipeline remains robust, and with the heavy calendar expected it will likely make it difficult for any meaningful spread tightening through year-end.

New York-based credit management firm Octagon Investment Partners priced $762.6 million of floating-rate and subordinated notes. The triple-A tranche priced below Libor plus 150 bps for a coupon and discount margin for 147 bps.

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