Wellfleet prices; Cerberus sells middle-market CLO; MJX refinances; CLO spreads tighten

By Cristal Cody

Tupelo, Miss., April 4 – While refinancing activity remains strong in the CLO market, new deals also are pricing.

Wellfleet Credit Partners, LLC placed a $457.8 million broadly syndicated CLO.

Cerberus Capital Management, LP brought a $604.31 million middle-market deal.

In refinancing action, MJX Asset Management LLC refinanced $407 million of notes from a 2014 CLO transaction.

“Refinancing activity was highly active in Q1; 103 deals refinanced, while six deals were reset over the quarter,” Wells Fargo Securities LLC analysts said in a note on Tuesday. “Year to date, refinancing/reset activity totals approximately $59 billion.”

The CLO secondary market also has been active in the first quarter of 2017.

“Secondary Trace volume increased nearly 66% [month over month] to $8.26 billion – the highest level since December 2016,” according to the Wells Fargo note.

Primary and secondary spreads tightened in March, the analysts said.

“Primary spread levels were tighter 2-5 [basis points month over month] for IG tranches, while BBB and BB tranches were 5-10 bps tighter,” the Wells Fargo analysts said. “Secondary spreads tightened relatively more – IG tranches tightened 7-30 bps, while lower-rated tranches were flat to slightly tighter [by 0 to 10 bps].”

CLO primary middle-market AAA spreads have tightened about 15 bps since February, according to the note.

Wellfleet prices CLO

Wellfleet Credit Partners priced $457.8 million of notes due April 15, 2029 in the new CLO offering, according to a market source.

Wellfleet CLO 2017-1, Ltd./Wellfleet CLO 2017-1 LLC sold $290.25 million of class A-1 senior secured floating-rate notes at Libor plus 132 bps and $52.9 million of class A-2 senior secured floating-rate notes at Libor plus 170 bps in the senior tranches.

Citigroup Global Markets Inc. arranged the offering.

Wellfleet Credit Partners priced two CLOs in 2016.

The Greenwich, Conn.-based performing credit arm was created in 2015 by private investment firm Littlejohn & Co., LLC.

Cerberus taps middle market

Cerberus Capital Management priced $604.31 million of notes in the middle-market CLO offering, according to an informed source.

Cerberus Loan Funding XVIII LP sold $306.45 million of class A floating-rate notes at Libor plus 175 bps at the top of the capital stack.

Wells Fargo Securities LLC was the placement agent.

The New York-based firm priced one middle-market CLO transaction in 2016.

MJX refinances $407 million

MJX Asset Management refinanced $407 million of notes due April 15, 2026 from the vintage 2014 Venture XVI CLO, Ltd./Venture XVI CLO, LLC transaction, according to a market source and a notice of optional redemption and notice of revised proposed supplement indenture on Monday.

The CLO sold $310 million of class A-1R senior secured floating-rate notes at par to yield Libor plus 112 bps in the AAA-rated tranche.

RBC Capital Markets, LLC arranged the transaction.

The New York City-based asset management firm priced three new CLO transactions and refinanced three CLOs in 2016.

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