Och-Ziff refinances $459 million CLO, AAAs price wider; strong deal pipeline forecast

By Cristal Cody

Tupelo, Miss., July 22 – Och-Ziff Loan Management LP refinanced $459 million of notes in a vintage 2012 CLO transaction with the AAA-rated tranche priced 2 basis points wider than original issuance.

Refinancing activity is up from a year ago, while U.S. and European CLO primary activity in the third quarter is expected to be robust, Moody’s Investors Service said in a report.

“We expect issuance to remain strong, with the number of transactions in the pipeline comparable to the year-ago level,” Moody’s said. “Many new managers have access to sufficient capital to meet U.S. risk-retention requirements. Some are public companies with large, diverse asset management businesses, including Och-Ziff Loan Management with approximately $48 billion of assets under management, and Oaktree Capital Management with around $100 billion of AUM.”

Och-Ziff refinances

Och-Ziff Loan Management refinanced $459 million of notes due July 22, 2027 in the vintage 2012 CLO deal, according to a market source.

OZLM Funding, Ltd. sold $322.8 million of class A-1-R senior secured floating-rate notes at Libor plus 152 bps, 2 bps wider than where the original notes priced.

The $58 million tranche of class A-2-R senior secured floating-rate notes were sold at Libor plus 235 bps, better than where the notes originally priced at Libor plus 325 bps.

The CLO refinanced $37.5 million of class B-R senior secured deferrable floating-rate notes at Libor plus 300 bps. The notes originally priced at Libor plus 375 bps.

OZLM sold $19.1 million of class C-R senior secured deferrable floating-rate notes at Libor plus 430 bps, tighter than where the notes were first priced at Libor plus 500 bps.

In the final tranche, the CLO refinanced $21.6 million of class D-R secured deferrable floating-rate notes at Libor plus 670 bps. The notes originally priced at Libor plus 610 bps.

Morgan Stanley & Co. LLC was the refinancing agent.

Och-Ziff will manage the CLO, which is secured primarily by broadly syndicated first-lien senior secured corporate loans.

Proceeds from the deal were used to redeem the original notes.

Och-Ziff Loan Management has priced three new CLOs year to date and brought four CLOs in 2014.

The firm is an affiliate of New York City-based alternative asset management Och-Ziff Capital Management Group LLC.

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