Churchill brings debut middle-market CLO; August supply strong; AAs at tightest since 2013

By Cristal Cody

Eureka Springs, Ark., Aug. 26 – Churchill Asset Management LLC priced a debut middle-market CLO, TIAA Churchill Middle Market CLO I, Ltd./TIAA Churchill Middle Market CLO I, LLC, according to a source on Friday.

TIAA-CREF Alternatives Advisors LLC is the manager of the CLO, while Churchill Asset Management will act as sub-advisor. Final pricing details were not available by press time.

Churchill is a New York-based credit asset management firm.

CLO action has been busier over the week in the broadly syndicated primary market, according to Wells Fargo Securities, LLC analysts on Friday.

“Several benchmark issuers priced CLOs this week, with new tights at the top of the capital stack,” the analysts said in a note. “Primary AAA spreads are now at 145 [basis points], AA spreads are at 180 bps and single-A’s are now 240 bps.”

AAA spreads are at the tightest seen since July 2015, while AA tranches are the tightest since summer 2013, the analysts said.

“Spreads have tightened even while issuance is up; August U.S. CLO issuance is now almost $6 billion, and August is now tied with April for the second-highest monthly total of 2016,” the analysts said.

Since Brexit, U.S. CLO single-A spreads have tightened 40 bps, and AA spreads have firmed 25 bps, according to the note.

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