SCIWire

US CLO demand continues

Tuesday 13 June 2017 15:01 London/ 10.01 New York/ 23.01 Tokyo

Demand for paper across the capital structure continues unabated in the US CLO secondary market.

"There's not a whole lot going on right now," says one trader. "However, we are still seeing good demand across the board."

The trader continues: "The BWICs that do appear are trading very well. Of late they have involved lower rated paper, which is mainly being sold by hedge fund accounts that bought at lower levels and now feel the optionality is running out on some of their positions and it's time to move on."

There is equally strong demand for paper higher up the stack, but less is coming in for the bid at the moment. "There's also investor appetite from triple-B to triple-A, so we're spending most of our time scrounging around trying to satisfy that," says the trader.

There are five BWICs on the US CLO calendar for today so far. The chunkiest is a three line double-B and equity mix due at 10:30 New York time.

The auction comprises: $5m APID 2013-12A E, $1.25m DRSLF 2013-26A E and $7m TICP 2014-3A SUB. Only APID 2013-12A E has covered on PriceABS in the past three months - at 99.4 on 7 June.

13/06/2017 15:01:15