SCIWire

US CLOs stable

Thursday 1 June 2017 14:39 London/ 09.39 New York/ 22.39 Tokyo

The US CLO secondary market continues to be stable.

"The market is taking a bit of a pause and we're in the gap between last week's CLO conference in New York and Barcelona next," says one trader. "Overall market tone remains cautiously optimistic."

The trader continues: "Secondary spreads remain stable with retail concerns not having an impact. Everyone is still looking for the stimulus to push us a bit wider, but there's nothing yet in evidence."

Nevertheless, the trader reports that secondary trading conditions are quite difficult. "Investors don't want to give up their CLO holdings as they're concerned they won't be able to access anything of similar quality to replace them. Equally, there's a strong focus on primary distracting people away from secondary - there, the emphasis has shifted away from refis to resets and real new issuance."

Meanwhile, Trups CDOs are seeing an uptick in secondary activity. "We're now seeing one or two BWICs regularly each week, but the sector continues to struggle for supply," the trader says. "For example, there is a Trups list today and while it's good to have a number of names to look at, the volume in current face terms is negligible."

There are five BWICs on the US CLO/CDO calendar for today so far. The longest is the aforementioned list that combines 13 Trups CDOs with 15 CLOs.

Totalling $35.519m original face the auction is due at 13:00 New York London time. It comprises: ALESC 12A A2, ALESC 1A A1, ALESC 8A B1, ATTN 2007-3A A1B, BLUEM 2013-2A D, BNPIP 2014-1A C, CGMS 2013-3A D, CGMS 2014-2A D, CIFC 2012-2A B1R, CTWTR 2015-1A D1, FLAGS 2014-8A D, KDIAK 2006-1A B, LCM 12A DR, MARLB 2007-1A D, MIDO 2013-2A E, MRNPK 2012-1A DR, OCT19 2014-1A D, PRETSL 18 A2, PRETSL 21 A1, PRETSL 24 A2, PRETSL 26 B2, PRETSL 9 B1, SYMP 2006-2A D, TBRNA 2006-6A A2, TRAP 2003-5A A1A, TRAP 2007-13A A2A, VENTR 2007-8A E and WASAT 2006-1A C.

Four of the bonds have covered with a price on PriceABS in the past three months. They last did so as follows: CGMS 2013-3A D at VH90S on 31 May; CGMS 2014-2A D at 100.09 on 6 April; MIDO 2013-2A E at 96.35 on 21 March; and VENTR 2007-8A E at 100A on 1 March.

01/06/2017 14:39:31