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Arrowpoint prices; CLO volume slows in pre-holiday weeks; heavier September volume eyed
By Cristal Cody
Tupelo, Miss., Aug. 20 – CLO issuance remains steady but volume is beginning to show signs of slowing down ahead of the Labor Day holiday, according to market sources on Wednesday.
“Everything – CLOs, the loan market, all of it has slowed to a crawl with the volatility in the high-yield and leveraged loan markets,” a market source said. “Investors seem to be happy to be out this week with a little bit of flow in the market.”
Issuance should ramp up in September, the source said.
Nearly $7 billion of notes have priced in 13 CLOs over the month, according to data compiled by Prospect News.
Arrowpoint Asset Management LLC brought $415 million of notes due 2026 in the Arrowpoint CLO 2014-3 Ltd./Arrowpoint CLO 2014-3 LLC deal, according to a market source.
The CLO priced the $250 million AAA-rated tranche of notes at Libor plus 155 basis points.
Goldman Sachs & Co. was the placement agent.
The Denver-based firm was previously in the primary market in June with the $150 million Peaks CLO 1 Ltd./Peaks CLO 1 LLC transaction. Arrowpoint Asset Management brought the $460.25 million Arrowpoint CLO 2014-2 Ltd./Arrowpoint CLO 2014-2 Corp. deal in February.
More than $96 billion of CLOs have priced in the U.S. and European primary markets year to date, according to data compiled by Prospect News.
“We’ve seen lot of paper going into the CLOs,” one source said.
Market analysts forecast up to $120 billion of total issuance for the year.
Deals that remain in the pipeline include a $411.75 million CLO offering from Black Diamond Capital Management, LLC. The Black Diamond CLO 2014-1, Ltd. vehicle is expected to price via J.P. Morgan Securities LLC, according to a market source.
The offering will be the alternative asset management firm’s first CLO transaction of the year. Black Diamond Capital was last in the primary market in December with the $412.9 million Black Diamond CLO 2013-1, Ltd./Black Diamond CLO 2013-1, LLC deal.
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