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October CLO volume to outpace September; Carlson preps deal; overall issuance strong
By Cristal Cody
Tupelo, Miss., Oct. 23 – October is expected to end on a stronger note with more CLO deal volume than September’s total, according to market sources on Friday.
More than $4.5 billion of CLOs have priced over the month, a source said.
In September, CLO managers priced $4.9 billion of deals.
“Despite a slowdown in the second half of the year, CLO issuance has been strong overall at more than $80 [billion] year to date,” Barclays Bank plc analysts said in a report on Friday. “Primary CLO creation has exceeded the issuance required to offset amortizing deals, which has led to incremental demand for loans. The health of the CLO market stands in contrast to the weakening asset base of loan mutual funds.”
Market analysts forecast as much as $100 billion of U.S. CLO volume in 2015.
Carlson Capital, LP is expected to price a $404.36 million CLO, the firm’s second transaction of the year.
Carlson Capital in pipeline
Carlson Capital plans to price $404.36 million of notes and loans in a CLO transaction, according to a market source.
The Cathedral Lake III Ltd./Cathedral Lake III LLC offering includes $2.5 million of class A-X floating-rate notes (/AAA/); $257 million of class A-1 loans (/AAA/); $46 million of class B floating-rate notes (/BB/); $24 million of class C deferrable floating-rate notes (/A/); $21 million of class D deferrable floating-rate notes (/BBB/); $20 million of class E deferrable floating-rate notes (/BB/) and $33.86 million of subordinated notes.
Jeffries LLC will arrange the transaction.
Carlson Capital is the CLO manager.
The notes are due Jan. 15, 2026.
The deal is backed primarily by broadly syndicated senior secured corporate loans.
Carlson Capital, a Dallas-based alternative asset management firm, has priced one CLO deal year to date.
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