SCIWire

US CLOs slow

Tuesday 11 April 2017 14:38 London/ 09.38 New York/ 22.38 Tokyo

The US CLO secondary market is slowing down ahead of the Easter holidays.

"It was always going to be a pretty slow week given the early finish on Thursday and Friday's close," says one trader. "But there really is very little to report."

In addition, secondary is still hampered by so many bonds being above par, the trader notes. "Yields and DMs to first call are really getting squeezed, which reduces appetite for paper and makes trading difficult."

Meanwhile, primary appears to be suffering from pre-holiday challenges as well. "We're hearing about spotty prints in some of the refi deals," the trader says. "The only thing we can figure is that some parts of the market are a bit overcrowded and so issuers are having to widen some tranches out to get the whole deal done."

There are currently three BWICs on today's US CLO calendar. The chunkiest is a six line $9.829m list due at 11:00 New York time.

It comprises: CIFC 2015-1A E1, DRSLF 2015-41A E, KVK 2015-1A D, PLMRS 2015-1A D, REGT5 2014-1A D and TICP 2014-3A E1. Three of the bonds have covered with a price on PriceABS in the past three months - CIFC 2015-1A E1 at 96.4 on 21 March; DRSLF 2015-41A E at 97H on 20 January; and KVK 2015-1A D at VL99H on 16 February.

11/04/2017 14:38:02