Secondary Trading Signals a Tougher Landscape for US CLO Equity
This week saw several US CLO equity tranches trade or be talked at levels materially lower than on their previous BWIC dates.
This week saw several US CLO equity tranches trade or be talked at levels materially lower than on their previous BWIC dates.
Yesterday saw two seasoned EU CLO BB tranches on BWIC. Both were DNT, though price colour was disclosed.
A large minority CLO equity note was on a BWIC yesterday, and the tranche traded well. The deal, originally priced with a closing date of 28 June 2023, recently completed a reset that extended its reinvestment end date from 20 July 2028 to 20 July 2030. The reset also reduced its WACC by around 74 bps, more than offsetting the decline in collateral WAS of roughly 63 bps.
Yesterday saw active trading in CLO equity. Blackstone, RBC BlueBay, Alcentra, and PGIM See Equity Tranches Stand Out in BWICs
Yesterday, a majority stake of €13.805 million in Dryden 103 Euro CLO 2021 subordinated notes was traded via BWIC. The deal’s performance is noteworthy: it was priced and closed in late 2022 with very wide liability spreads and a sizeable fixed-rate collateral exposure in a rising rate environment. These factors resulted in sub-par distributions until its reset in late 2024, immediately after the non-call period. At the time, the outlook appeared bleak, with equity NAV depressed and distributions running low. Since bottoming out in mid-2023, however, the deal has staged a steady recovery. Equity NAV rose consistently…
OHA Credit Funding 10-R CLO priced its AAA tranche today at 126 bps—the tightest level recorded since early April 2025. Other AAA reset prints over recent days ranged between 128 and 137 bps.
