Spreads on Triple A rated CLO paper withstood what is believed to be the largest CLO 2.0 Triple A auction on record this week.
The 62-name, ~$1.5bn Triple A CLO BWIC traded yesterday (December 4). The seller is understood to be a large US life insurer, freeing up cash to deploy in other sectors.
All bonds listed on the BWIC traded after finding solid buyer demand, according to market sources.
“The biggest high-level takeaway for me was how well this list was absorbed, with over 100 bids and more than one client bid across every line item,” said a trader.
Triple A spreads had softened 2-3bps in anticipation of the auction during this week’s sessions, but Tier 1 names traded in line with talk, said sources, while execution was a little weaker in T2/T3 names, as expected.
Dealers had been net sellers of IG risk going into this week, which helped absorb the surge in supply, a buysider added.
Anna Carlisle
anna.carlisle@levfininsights.com
+44 (0)20 7469 0981
David Graubard
david.graubard@levfininsights.com
+1 646 361 6095
