Both primary US BSL and EU CLO AAA tranches are currently pricing wide relative to year-to-date averages, which negatively affects new issue equity arbitrage. That said, the market is likely to self-correct over time, and as long as loan market conditions remain strong, there is no reason AAA spreads should not tighten further.
The single-B tranche is a useful way to increase the leverage of US BSL CLO deals and reduce the amount...
With the recent reset pricing, OHA Loan Funding 2013-1, managed by Oak Hill Advisors, now boasts the longest reinvestment period in the CLO market at nearly 16 years!
As shown in the graph in this freemium article, with the 4-week moving average loan spread now firmly staying below the 400 bps mark, the current top-tier US BSL CLO AAA print increasingly appears cheap relative to historical prints. If you’re an investor in the CLO market, we would like to invite you to register with us using your business email address to gain free access to our freemium content.
The US CLO arbitrage (arb) has remained largely rangebound since July 2023. However, recently, there has been a noticeable downward trend in the arbitrage metric for new-issue US CLOs.
Recently, Golub Capital CLO 71 (M) was priced at 195/260/325/510 for its AAA/AA/A/BBB tranches, respectively. Given the size of the deal, achieving these pricing levels was impressive.
