Deerpath senior CLO tranche reaches 195bp to shed light on mid-market pricing

By Sayed Kadiri

Deerpath Capital Management has revealed mid-market CLO pricing levels in the primary market after disclosing discount margins on its new issue, which priced on Monday. Sources say the firm printed Deerpath CLO 2022-1 yesterday courtesy of GreensLedge and Raymond James (co-placement agent) with senior notes pricing at 195 basis points over Sofr.

Seven mid-market CLOs have priced in 2022, but DMs have only been disclosed on three of those (including the Deerpath transaction). Blackstone Credit priced BCRED MML CLO 2022-1 on 10 February with triple A notes pricing at 165bp and attaching at 45%. Then on 1 April, Cerberus Capital Management priced Cerberus Loan Funding XXXVII with first pay notes at 178bp (attaching 46.25%).

Both of those CLOs had four-year reinvestment periods, whereas the Deerpath CLO has a three-year reinvestment window. The Deerpath CLO triple As attach a shade lower at 44.1%.

The two most recent mid-market CLO prints from Deerpath and Cerberus highlight how pricing in this sector has shot back to September 2020 levels. Mid market and broadly syndicated loan CLOs have moved in sync with each other in the last two months with BSL CLOs also retreating to wides not seen since September 2020.