March ‘good month’ for CLOs; Valeant sparks concerns; BB, B notes active in secondary

By Cristal Cody

Eureka Springs, Ark., March 16 – March CLO primary action continues to show signs of waking with a new deal priced by Wellfleet Credit Partners, LLC.

Wellfleet Credit Partners sold $358.5 million of notes in the Wellfleet CLO 2016-1, Ltd./Wellfleet CLO 2016-1 LLC transaction via Morgan Stanley & Co. LLC. Final pricing details were not available by press time.

“March has been a good month so far for leveraged loans and CLOs as for other risk markets,” Deutsche Bank Securities Inc. analyst Bjarni Torfason said in a note released on Wednesday. “Since the bottom in late February, leveraged loans in CLOs have risen close to 2 points on average, and oil and gas loans have jumped by 4 points.”

Some buzz of concern surrounded CLO investments in Valeant Pharmaceuticals International Inc. on Wednesday. The company’s stock inched up 0.09% to $33.54 after losing more than 50% of its value on Tuesday following an announcement of lower earnings and revenue forecasts and a risk of breaching debt agreements.

“CLO trading activity of Valeant in the first two months of the year was largely within a tight range; the weighted-average buy price was $96.42, whereas the weighted-average sale price was $96.35,” according to a Wells Fargo Securities LLC report on Wednesday.

CLO secondary market activity remains active so far this week.

“Spreads in the secondary market have been grinding tighter, particularly at the BB level,” Torfason said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.