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Marathon prices $460 million CLO; new issue, refinancing supply forecast to pick up
By Cristal Cody
Tupelo, Miss., Sept. 10 – Marathon Asset Management LP tapped the CLO primary market in September with a new $460 million offering.
Volume has slowed, though strong issuance is expected as the month gets underway, according to market sources.
“With many deals already issuing guidance, we expect September to be another month of heavy new issuance,” according to a BofA Merrill Lynch research note released on Monday. “Primary spreads remain attractive and we expect new refinance volume to remain strong throughout year-end.”
Refinancing and reset supply is expected to pick back up in October, when many deals have payment dates, Wells Fargo Securities LLC analysts said in a CLO market report on Sept. 5.
CLO refinancing and reset volume totals about $78 billion year to date, while new issuance of about $93 billion is running $20 billion ahead of the same period a year ago, according to the Wells Fargo report.
Wells Fargo analysts forecast $150 billion of new CLO volume in 2018.
CLO issuers priced $118 billion of new CLOs in 2017.
Marathon prices XII
Marathon Asset Management sold $460 million of notes due April 18, 2031 in the offering on Thursday, according to a market source.
The Marathon CLO XII Ltd./Marathon CLO XII LLC deal included $274.1 million of class A-1 senior secured floating-rate notes (Aaa/AAA) priced at Libor plus 118 bps.
J.P. Morgan Securities LLC was the placement agent.
The deal is backed primarily by broadly syndicated first-lien senior secured corporate loans.
Marathon has priced two new CLOs year to date.
The global credit manager is based in New York City.
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