U.S. CLO Market Picks Up Steam in 2017

According to an article in Asset Securitization Report, the U.S. new issue CLO market has picked up steam, following a slow start in January.

Six new CLOs have hit the market in the past week, with four of the deals over $600 million in size and the largest being an $800 million deal.

The flurry of activity comes after a slow start to the year that saw just two new issues in January and a market that was led by refinance deals. The total amount of refinance deals in January amounted to $7.7 billion combined through 18 deals, as compared to $981 million in two new issues over the same period.

For the CLOs that have priced so far this year, AAA spreads have continued to tighten, with the three most recent deals averaging 135 bps over LIBOR, as compared to 145 bps in January. In addition, the average bid prices of U.S. CLO portfolios at the end of 2016 edged higher to 98.28, a 17 bps gain year over year and was matched by a strengthening of the median bid price, which increased to 98.51, signaling that 78 percent of the U.S. CLOs have a weighted average bid on assets in the 97 to sub-100 area.

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