Spreads continue tightening for CDOs: Carlyle found it pays to wait

CDO pricing can't get much better. Last week, Carlyle Investment Management was able to bring its high yield loan- backed 7.85-year triple-As at 37 basis points over three-month Libor. Carlyle High Yield Partners VI, which was led by Wachovia Securities, had been in the pipeline since last fall, when guidance for the senior class was 48 over Libor. Talk was revised in recent weeks to the 37 area, and the deal made good (see triple-A pricing chart, p. 11).

One source called this the tightest CLO print since 1998.