March primary robust; Arrowpoint raises $408.1 million; Prudential prices; Babson on tap

By Cristal Cody

Tupelo, Miss., March 27 – U.S. CLO issuance remains strong with about $12 billion priced in March and more than $26 billion year to date, sources said on Friday.

“CLO issuance has been strong after a slow start to the year,” Barclays Bank plc analysts said in a note. “Another six structures have priced since last Friday.”

Arrowpoint Asset Management LLC tapped the market with a $408.1 million CLO offering.

Also in pricing action, Prudential Investment Management, Inc. brought a $512 million CLO deal via Morgan Stanley & Co. LLC, according to market sources.

The AAA-rated tranche priced at Libor plus 143 basis points. Final pricing details were not available by press time.

Prudential, the primary asset management business of Newark, N.J.-based Prudential Financial, Inc., brought three U.S. CLO deals in 2014.

Prudential’s new CLO had a “slightly unique structure,” according to a Wells Fargo Securities, LLC note on Friday from senior analyst Dave Preston and associate analyst Jason McNeilis. “The deal has a three-year non-call and a five-year reinvestment.”

Coming up in the pipeline, Babson Capital Management LLC plans to price a $566.25 million CLO transaction, according to a market source.

Arrowpoint prices CLO

Arrowpoint Asset Management priced $408.1 million of notes due April 18, 2027 in a CLO deal, according to a market source.

Arrowpoint CLO 2015-4 Ltd./Arrowpoint CLO 2015-4 LLC sold $252.25 million of class A floating-rate notes at Libor plus 155 bps in the senior AAA tranche.

Deutsche Bank Securities Inc. was the placement agent.

The deal has a non-call period that ends April 18, 2017. The reinvestment period ends April 18, 2019.

The CLO is backed primarily by broadly syndicated senior secured corporate loans.

Arrowpoint Asset Management priced two CLO deals in 2014.

The Denver-based firm is the investment advisor arm of Meridian Funds.

Babson preps CLO

Looking ahead, Babson Capital Management plans to price a $513.1 million CLO transaction, according to a market source.

The Babson CLO 2015-I Ltd./Babson CLO 2015-I LLC deal includes $320 million of class A floating-rate notes (//AAA); $53.3 million of class B floating-rate notes; $25.2 million of class C floating-rate notes; $33.6 million of class D floating-rate notes; $28 million of class E floating-rate notes; $9.5 million of class F floating-rate notes and $43.5 million of subordinated notes.

J.P. Morgan Securities LLC is the placement agent.

The CLO has a 1.5-year non-call period and a four-year reinvestment period.

The notes are due April 15, 2027.

The CLO is backed primarily by first-lien senior secured loans.

Proceeds from the offering will be used to purchase a portfolio of about $500 million of primarily senior secured leveraged loans.

Babson brought three U.S. CLO transactions and two euro-denominated CLO deals in 2014.

The global asset management firm is based in Springfield, Mass.

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