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CSAM's 1st CLO of 2019 bests market average for AAA

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Credit Suisse Asset Management is pricing its first CLO deal of the year, the $503.3 million Madison Park Funding XXXIV, at a more favorable rate than many recent transactions from its peers.

The $294.5 million Class A-1 notes tranche, which is rated AAA by Fitch Ratings, pays a spread of 133 basis points over Libor. That compares favorably to the average spread of 138 basis points across the AAA-rated tranches of four new-issue collateralized loan obligation portfolios that priced last week, according to Deutsche Bank.

Those deals, from Bain Capital, Golub Capital, Invesco and Texas-based Trinitas Capital Management, priced in ranges from 137 (Golub) to 146 (Trinitas), according to Deutsche Bank.

The spread Madison Park XXXIV’s Class A-1 rate is wider, however, than that of Credit Suisse’s previous CLO transaction, completed in December (120 basis points).

The new deal has another AAA-rated tranche the $27.8 million Class A-2, that pays a fixed rate of 4.31%.

Fitch is not rating the Class B ($50.1 million), Class C ($28.8 million) or Class C ($31.3 million) notes, but is assigning a BB- rating to the $21.3 million Class E notes rated BB-.

Madison XXXIV have a five-year reinvestment period and will be non-callable for two years.

Last week brought March’s total volume issuance up to $4.45 billion across nine deals, an “anemic” figure compared to more than $13.2 billion in February CLO new-deal volume that was the largest in eight months, according to JPMorgan.

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