Apollo Credit brings $1.54 billion CLO; 3i, Apollo Global tap European market; AAAs improve

By Cristal Cody

Tupelo, Miss., June 6 – Apollo Credit Management (CLO) LLC priced a $1,542,100,000 collateralized loan obligation deal on Friday in the largest offering brought since the financial crisis, according to a market source.

Apollo sold the AAA tranche at Libor plus 143 basis points.

The deal is the second $1 billion-plus CLO offering in less than a month. Onex Credit Partners LLC priced the $1,001,750,000 OCP CLO 2014-6 Ltd./OCP CLO 2014-6 Corp. transaction on May 22.

Friday’s pricing action also included euro-denominated deals from 3i Debt Management Investments Ltd. and Apollo Global Management, LLC.

3i Debt priced €525 million of notes in the Harvest IX CLO Ltd. offering and placed the AAA tranche at Euribor plus 135 bps.

Apollo Global Management brought a €382.4 million European CLO and priced the AAA-rated notes at Euribor plus 135 bps.

“AAA spreads have shown a slight bias toward tightening, despite the large primary supply,” Wells Fargo Securities, LLC senior analyst Dave Preston and associate analyst Jason McNeilis said in a note.

NewStar Financial, Inc. returned to the market after its April deal with a $409,417,000 middle market CLO transaction, according to sources.

The CLO priced the AAA tranche at Libor plus 175 bps.

Primary action is expected to stay strong through June with nearly $15 billion of transactions in the pipeline, a source said on Friday.

Coming up in the week ahead, Invesco Senior Secured Management, Inc. plans to price a $617,875,000 CLO, according to a source.

In the European pipeline, Pramerica Investment Management Ltd. intends to offer a €417 million deal, according to a source.

Elsewhere on Friday, Golub Capital BDC, Inc. said in a release that the previously announced $401.8 million Golub Capital Partners BDC CLO 2014 LLC middle market deal that priced in May has closed.

Golub said it retained all of the $37.5 million of class C notes and $118.3 million of equity interest notes of the CLO.

In connection with the CLO closing, subsidiary Golub Capital BDC Funding LLC amended its senior secured revolving credit facility with Wells Fargo Bank, NA to decrease the size to $150 million from $250 million.

The affiliate of New York-based middle market lender Golub Capital has priced three CLO deals year-to-date.

Apollo prices $1.54 billion CLO

Apollo Credit Management priced $1,542,100,000 of notes due 2026 in the CLO deal on Friday, according to a market source.

The ALM XIV, Ltd. CLO sold $930 million of class A-1 senior secured floating-rate notes (Aaa//AAA) at Libor plus 143 bps at the top of the structure.

The CLO priced $163,225,000 of class A-2 senior secured floating-rate notes (Aa2//) at Libor plus 210 bps; $83,925,000 of class B senior secured deferrable floating-rate notes (A2//) at Libor plus 295 bps; $107.5 million of class C senior secured deferrable floating-rate notes (Baa3//) at Libor plus 345 bps; $100.1 million of class D secured deferrable floating-rate notes (Ba3//) at Libor plus 485 bps and $157.35 million of preferred shares.

J.P. Morgan Securities LLC arranged the deal.

Apollo Credit Management will manage the CLO, which is collateralized primarily by broadly syndicated first lien senior secured corporate loans.

Proceeds from the offering will be used to purchase a portfolio of about $1.5 billion of mostly senior secured leveraged loans.

New York City-based Apollo Credit Management, a subsidiary of Apollo Global Management, LLC, priced four CLO deals in 2013.

3i Debt sells €525 million

3i Debt Management Investments priced €525 million of notes due 2028 in the Harvest IX CLO, according to a market source.

The CLO sold €304.2 million of class A senior secured floating-rate notes (Aaa//AAA) at Euribor plus 135 bps.

The CLO sold €60.8 million of class B senior secured floating-rate notes (Aa2//AA) at Euribor plus 190 bps.

Lower in the capital structure, the CLO priced €30.4 million of class C senior secured deferrable floating-rate notes (A2//A) at Euribor plus 240 bps; €24.1 million of class D senior secured deferrable floating-rate notes (Baa2//BBB) at Euribor plus 300 bps; €35.5 million of class E senior secured deferrable floating-rate notes (Ba2//BB) at Euribor plus 450 bps and €15 million of class F senior secured deferrable floating-rate notes (B2//B-) at Euribor plus 525 bps.

The deal included €55 million of subordinated notes in the equity tranche.

Credit Suisse Securities (Europe) Ltd. was the placement agent.

3i Debt Management will manage the CLO, which is backed primarily by first lien senior secured obligations and eligible investments.

Proceeds from the deal will be used to purchase a portfolio of mostly European leveraged loans.

3i Debt Management was last in the European market in February with the €425 million Harvest VIII CLO Ltd. deal.

The firm is part of London-based 3i Group plc.

Apollo raises €382.4 million

Apollo Global Management sold €382.4 million of notes due June 23, 2027 in the ALME Loan Funding II Ltd. offering, according to a market source.

The CLO priced €223.5 million of class A floating-rate notes (//AAA) at Euribor plus 135 bps; €40.8 million of class B floating-rate notes (//AA+) at Euribor plus 195 bps; €20.6 million of class C floating-rate notes (//A+) at Euribor plus 255 bps; €23.3 million of class D floating-rate notes (//BBB) at Euribor plus 340 bps; €25.9 million of class E floating-rate notes (//BB) at Euribor plus 505 bps; €11.3 million of class F floating-rate notes (//B-) at Euribor plus 580 bps and €37 million of subordinated notes.

J.P. Morgan Securities plc arranged the transaction.

London-based Apollo Management International LLP will manage the CLO.

The CLO is backed primarily by senior secured obligations.

Proceeds from the deal will be used to purchase a portfolio of European leveraged loans and bonds.

New York City-based Apollo priced the €334.23 million ALME Loan Funding 2013-1 Ltd. transaction in 2013.

NewStar brings $409.4 million

NewStar Financial priced $409,417,000 of notes due July 25, 2025 in the middle market CLO transaction, according to sources.

NewStar Arlington Senior Loan Program LLC sold $193.5 million of class A-1 senior secured floating-rate notes (Aaa//) at Libor plus 175 bps and $40 million of class A-2 senior secured floating-rate notes (Aaa//) at Libor plus 153 bps, which step up to Libor plus 198 bps after 24 months.

NewStar also priced $32.75 million of class B-1 senior secured floating-rate notes (Aa2//) at Libor plus 260 bps; $5 million of 4.7% class B-2 senior secured fixed-rate notes (Aa2//); $28.5 million of class C-1 deferrable floating-rate notes (A2//) at Libor plus 330 bps; $5 million of 5.9% class C-2 deferrable fixed-rate notes (A2//); 28 million of class D deferrable floating-rate notes (Baa3//) at Libor plus 425 bps; $27 million of class E deferrable floating-rate notes (Ba3//) at Libor plus 610 bps and $9 million of class F deferrable floating-rate notes (B2//) at Libor plus 625 bps.

The deal included $40,667,000 of subordinated notes in the equity tranche.

Wells Fargo Securities, LLC was the placement agent.

NewStar Financial will manage the CLO, which is backed primarily by small to middle enterprise loans.

NewStar Financial was last in the market in April with the $348.4 million NewStar Commercial Loan Funding 2014-1 LLC transaction. The firm has brought a total of nine securitization deals.

The middle market commercial lender is based in Boston.

Invesco preps $617.8 million CLO

Looking to the week ahead, Invesco Senior Secured Management plans to price $617,875,000 of notes due 2026 in a CLO deal, according to a source.

The A Voce CLO, Ltd./A Voce CLO LLC deal includes $194 million of class A-1A senior secured floating-rate notes (//AAA); $192.4 million of class A-1B senior secured floating-rate notes (//AAA); $64.1 million of class A-2A floating-rate notes; $5 million of class A-2B fixed-rate notes; $28.8 million of class B floating-rate notes; $33.7 million of class C floating-rate notes; $34.2 million of class D floating-rate notes; $5.1 million of class E floating-rate notes and $60,575,000 of subordinated notes.

Citigroup Global Markets Inc. is the placement agent.

Invesco Senior Secured Management will manage the CLO.

Proceeds from the deal will be used to purchase assets to reach a target portfolio of about $600 million of primarily leveraged loans.

Invesco Senior Secured Management, a subsidiary of Atlanta-based Invesco, Ltd., was in the market on April 2 with the $315.75 million refinancing of the Avalon IV Capital, Ltd./Avalon IV Capital LLC transaction. The firm priced the $669.75 million Limerock CLO II Ltd./Limerock CLO II LLC deal in February.

Pramerica preps €417 million deal

In the European pipeline, Pramerica Investment Management plans to offer a €417 million deal, according to an informed source.

Barclays Bank plc is the placement agent.

Pramerica Investment Management is the London-based leveraged finance arm of Newark, N.J.-based Prudential Financial, Inc.

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