Gulf Stream prices $281.95 million CLO; non-high-grade paper gains; loan outflows down

By Cristal Cody

Tupelo, Miss., May 15 – Gulf Stream Asset Management LLC priced $281.95 million of notes in the manager’s second CLO offering of the year.

Gulf Stream Meridian 2 Ltd. sold $160 million of class A-1a floating-rate notes at Libor plus 220 basis points at the top of the capital structure.

The market is slowly reopening since volume stopped after the pandemic was announced in March.

Downgrades of corporate issuers have weighed on portfolio quality of U.S. broadly syndicated loan CLOs under Fitch Ratings’ surveillance, Fitch said in a report on Friday.

“This can be seen in the weighted average rating factor levels, which have weakened (increased) to an average 36.7 in April, up from 34.5 just one month earlier,” Fitch said.

Meanwhile, leveraged loan funds had fewer outflows for the past week ended Wednesday, according to Fitch.

Outflows totaled $330.2 million, down from $484.8 million of redemptions in the prior week.

Trading volume increased to $252.35 million for non-high-grade CBO/CDO/CLO issues from $177.99 million on Wednesday, $197.61 million on Tuesday and $227.45 million on Monday, Trace data shows.

The lower-rated securities traded at an average 71.30 on Thursday, stronger than where the issues averaged 69.50 on Wednesday, 69.90 on Tuesday and 63.30 on Monday.

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