Creditflux Newsletter

JP Morgan has priced a $305 million CLO for Prudential, its first CLO of the year, according to Bloomberg. A couple of months ago, officials at the bank told Creditflux that CLOs remain a core part of JP Morgan’s plans and this deal appears to be the first of many the arranger has lined up.

The deal is known as Dryden XXII Senior Loan Fund and is Prudential’s first US CLO since August 2008.

According to Bloomberg, the triple-A section in this new CLO has printed at 152.5 basis points over Libor, which represents a tighter print than was originally expected. Pre-sale reports released by Moody’s and S&P dated from last month assumed a 160bp and 155bp coupon on the senior notes respectively.

The Moody’s pre-sale report states that the transaction will allow for a 5% limit on senior bonds and floating rate notes while a 7.5% bucket is available to invest in DIP loans, second lien loans, senior unsecured loans and high yield bonds. Other recent CLOs have been composed along tighter guidelines with exposure permitted to senior secured loans only.

Dryden XXII has its final maturity slated for December 2022. The CLO will also come with a two-year non-call period and a three-year reinvestment period.

Dryden XXII Senior Loan Fund