Audax brings $481.04 million CLO; Guggenheim prices $419.13 million; spreads improve

By Cristal Cody

Tupelo, Miss., Nov. 18 – Two CLO managers tapped the middle-market space with new transactions.

Audax Management Co. (NY) LLC priced $481.04 million of loans and notes in the manager’s second CLO transaction backed by broadly syndicated and middle-market first-lien senior secured loans this year.

Guggenheim Partners Investment Management LLC priced a $419.13 million middle-market CLO.

In the broader market, the U.S. CLO space continued “to stabilize” last week amid a more positive tone across the CLO capital stack and following improvement in loan prices, BofA Securities, Inc. analysts said in a research note released Monday.

“Halfway through the month, November is already looking much better for U.S. CLOs than October with IG spreads supported by real money demand and renewed interests in lower mezz pushing credit spreads tighter,” the analysts said.

In the secondary market, broadly syndicated CLO AAA spreads tightened by 2 basis points last week to head out on Friday at the Libor plus 123 bps area on average. AA spreads ended Friday 5 bps better on the week at the Libor plus 195 bps area, according to the report.

Lower down the stack, BBB spreads firmed 10 bps to the Libor plus 400 bps area, while BB tranches tightened 25 bps to an average Libor plus 775 bps on the week.

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