US CLOs: Loan prices – revisiting the lows of the year

After a multi-week repricing, loan prices are nearing their trough for the year, propelled by growing credit anxiety and interest rate uncertainty. Deal activity in CLO primary last week skewed towards repricings, with $5.1B in deal activity. At nearly $110B on the year, Refis continue to outpace last year's level, taking share from Resets which dominated repricings last year, accounting from roughly 70% of last year's total repricing volume. However, spread levels have been broadly supportive for Reset activity since late Q2, with AAAs currently averaging 3M SOFR + 122 bps, and BBBs 277 bps. This is the tightest that BBB Resets have priced since early February and represent a return to healthy investor demand for this bond profile. New issue activity was relatively subdued last week, with four deals pricing for $1.9B in total.