Wellfleet taps market; Alcentra brings $442.7 million CLO; deal volume thin; spreads widen

By Cristal Cody

Tupelo, Miss., Aug. 31 – Littlejohn & Co., LLC’s Wellfleet Credit Partners, LLC brought a debut $360 million CLO deal and priced the AAA-rated tranche at Libor plus 165 basis points, on the wide side of recent issuance.

Final pricing details also emerged for Alcentra NY LLC’s previously reported $442.7 million CLO deal, which was downsized from an expected $514.45 million.

U.S. CLO volume ended August with about $6.5 billion priced in 13 deals, according to Prospect News data.

The month saw four consecutive weeks “with less than $2 billion” of issuance, J.P. Morgan Securities LLC analysts said in a market note.

U.S. AAAs continue to price on average in the Libor plus 144 bps to Libor plus 158 bps area, while European AAA issuance has remained in the Euribor plus 135 bps area.

In the U.S. secondary market, activity stayed light with less than $220 million of BWIC volumes over the previous week, according to BofA Merrill Lynch.

About half of the bonds traded were rated AAA, and senior spreads widened by 8 bps to 10 bps, “while mezzanine levels pushed out by 20-25 [bps],” BofA Merrill Lynch analysts said in a note. “About 20% of the 2.0/3.0 line items were reported to not have traded.”

In the European CLO secondary market, about €130 million of euro-denominated BWIC volume was seen over the previous week with the bulk concentrated in AAA and AA bonds, according to BofA Merrill Lynch.

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