New CLO volume thins; CLOs improve ‘mildly’; spreads 10 bps-50 bps wider from year ago

By Cristal Cody

Tupelo, Miss., Dec. 5 – New CLO volume was light over the week, while primary activity in the week ahead may thin, according to market sources on Friday.

“A few deals priced last week and a couple of deals have priced this week,” one source said. “New issue volume is down a little bit this week from last week.”

BlackRock Financial Management, Inc. priced $560.75 million of notes in the Magnetite XI, Ltd./Magnetite XI LLC offering, according to a market source.

The company sold notes due Dec. 18, 2026, including $349.25 million of class A-1 floating-rate notes (//AAA); $63.75 million of class A-2 floating-rate notes; $30.75 million of class B floating-rate notes; $33 million of class C floating-rate notes; $30.25 million of class D floating-rate notes and $53.75 million of subordinated notes.

Credit Suisse Securities (USA) LLC was the placement agent.

Additional pricing details were not available by press time.

Secondary CLO 2.0 spreads are ending 2014 wider compared to the end of 2013 “as heavy supply throughout the year has left little room for tightening,” Barclays analysts said in a report on Friday.

“Spreads are wider across the ratings spectrum.”

AAA notes are closing the year 10 bps softer, while AAs are ending 50 bps wider and A-rated notes are going out 30 bps wider compared to a year ago, Barclays said.

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