The CLO new-issue market continues to chug along, with five new deals totaling $2.6 million printed last week, according to a report from Bank of America Merrill Lynch.
The transactions included the largest broadly syndicated deal since the crisis, an $802 million CLO arranged by BofA Merrill for Credit Suisse Asset Management (CSAM).
This deal marks CSAM’s fourth CLO of 2012, following on the heels of a $516.3 million fund via Credit Suisse in September. Oak Hill Advisors previously held the record for the largest CLO this year, a $770 million fund the firm raised last month, also via BofA Merrill.
The latest CSAM CLO includes a $300 million triple-A-rated tranche that pays a rate of Libor plus 137 bps. It’s one of two recent deals that have broken through the 140 basis points floor for triple-A paper that has been in place since the summer. The other was last week’s $624 million CLO for Prudential Investment Management via Goldman Sachs, which had triple-A pricing at Libor plus 138.
Pricing is still above the 130 bps level that was seen in first half of the year and the post-crisis lows of 120 basis points, which printed in July 2011, BofA Merrill analysts note in their report.
As we head toward the end of the year and managers look to price their final deals, volume has now topped $43 billion. This is close to the upper end of revised analyst forecasts, which ranged up to $45 million. JPMorgan Securities analysts believe there could be $60 billion to $70 billion in CLO volume in 2013.