CLO issuance continues to catch up with 2015 levels as managers race to complete deals before risk retention rules take effect next month.
Another seven collateralized loan obligations priced last week, raising the monthly total to $13.1 billion in 29 transactions (including refinancings and resets) through Nov. 17, according to JPMorgan.
A total of 193 U.S. CLOs totaling $84.6 billion have priced year to date; that is nearly equal to the total deal count for the same period of 2015 (195) and just 14.9% behind the comparable volume of $99.3 billion.
At the end of October, CLO issuance of $54.5 billion (120 deals) was pacing 35% behind 2015 levels $86.6 billion (165 deals).
Among deals closing last week was MJX Asset Management’s upsized $601.6 million Venture CLO XXV and Voya Investment Management’s $707 million VOYA CLO 2016-4, according to Thomson Reuters LPC. In addition, BlackRock completed a refinancing of its $489 million Magnetite XII, a deal originally issued in 2015 and Arrowpoint Partners reset its $331 million Arrowpoint 2013-1 transaction through Goldman Sachs.
Earlier in the week, Palmer Square Capital Management closed its third CLO of the year (a $253 million deal) through JPMorgan; and CVC Credit Partners refinanced its $410 million Apidos CLO 2014-17R via Bank of America Merrill Lynch.
Credit Suisse priced the lone European market deal of the week, with its Cadogan Square CLO 2016-8 with notes totaling €479 million. Year-to-date Euro CLO volume is €15.8 billion in 39 deals, compared to €12.5bn in 31 deals at the same point in 2015.
U.S. deal volume has accelerated as managers seek to avoid rules taking effect Dec. 24 that will require them to hold on to 5% of the economic risk of their deals.
U.S. deal volume from September through Nov. 17 totals $40.1 billion, including $20.1 billion of refi volume along. October’s $9.3 billion in refinancing and resets was an all-time monthly high for the market, according to JPMorgan. JPMorgan estimated in September that approximately 425 broadly syndicated CLOs totaling $218 billion were refi-eligible heading into the fall.
The level of refi activity masks the “sharply reduced” new primary volume that has occurred in this year’s market, according to JPMorgan. The CLO volume excluding refis and resets totaled $57.9 billion at the beginning of last week, 35% off from the comparable year-to-date volume of $88.4 billion.