June strong month for volume; Guggenheim prints second CLO; Benefit Street Partners prices

By Cristal Cody

Eureka Springs, Ark., June 29 – CLO primary action has slowed in the days following Brexit, but volume has been strong over June.

The month has seen about $6.14 billion of CLO volume to date and is closing out with the largest monthly issuance this year, according to a Deutsche Bank Securities Inc. note released on Wednesday.

Details emerged for Guggenheim Partners Investment Management LLC’s second CLO offering in June. The CLO manager priced a $404.99 million transaction in tandem with its $401.45 million Seven Sticks 2016-1 CLO Ltd. deal on June 15.

Benefit Street Partners LLC also tapped the CLO primary market for the first time this year with a $404.4 million deal.

Spreads have begun to stabilize in the CLO markets following two sessions of weakness after Britain voted to exit the European Union, Deutsche Bank Securities analyst Bjarni Torfason said in the note.

“CLO spreads widened in the secondary market on Friday and Monday,” he said. “The widening mainly took place in junior mezz but also affected the most senior tranche. If Tuesday’s rebound in markets more broadly holds ground, then we should see some of the widening reverse. We are still to see how primary market spreads react as no deal has priced since the referendum.”

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