Apollo refinances $1.18 billion CLO; Brigade refinances notes; GoldenTree CLO compliant

By Cristal Cody

Tupelo, Miss., April 12 – Apollo Credit Management (CLO) LLC refinanced $1,177,160,000 of vintage 2014 CLO notes, while Brigade Capital Management, LLC refinanced $359 million of fixed- and floating-rate notes from a 2014 deal.

About $60 billion of CLOs have been refinanced and repriced year to date, according to market sources.

“The refinancing wave has continued into April; 11 deals were refinanced or reset in the first six days of April, and 120 deals have been refinanced or reset year to date,” according to a Wells Fargo Securities LLC note released on Wednesday.

“Manager tiering in is more pronounced in shorter refi's: AAA and AA investors get an extra 5-15 [basis points] moving from a larger manager to a smaller manager in shorter refi's,” the Wells Fargo analysts said in the note. “Tiering in AAA and AA refi tranches has decreased during 2017, but tiering for single-A and BBB refi tranches from smaller managers has actually increased in 2017.”

GoldenTree closes

In other activity, GoldenTree Loan Management LP and affiliated investment manager GoldenTree Asset Management announced on Wednesday that the previously reported $711 million GoldenTree Loan Management US CLO 1 Ltd./GoldenTree Loan Management US CLO 1 Inc. transaction closed.

“The CLO, GoldenTree Loan Management US CLO 1, is the first to be issued under GoldenTree's previously announced new CLO strategy whereby GLM raised $600 million in commitments to invest in and manage CLOs that are intended to be compliant with U.S. and European risk retention regulations,” GoldenTree said in the release.

The CLO will initially be backed by a 96% ramped $670 million portfolio of senior secured loans as of closing.

The CLO priced on March 9 and was arranged by a bank syndicate including Morgan Stanley & Co. LLC as structuring lead, BofA Merrill Lynch and Wells Fargo Securities LLC as co-leads and GreensLedge Capital Markets LLC as placement agent.

GoldenTree said the syndicate globally distributed the investment-grade rated notes issued by the CLO, while it invested in the CLO's equity and lower rated notes.

The $429 million AAA-rated tranche of senior notes due April 20, 2030 priced at Libor plus 122 basis points. The CLO has an overall weighted average floating-rate coupon of Libor plus 174 bps.

Since it was formed in 2000, GoldenTree said it has issued more than $11 billion of CLOs with over $5 billion now outstanding.

GoldenTree Asset Management has priced one new CLO and refinanced one vintage CLO year to date.

In 2016, GoldenTree Asset Management placed one U.S. CLO and refinanced two vintage CLOs.

The asset management firm is based in New York City.

Apollo refinances notes

Apollo Credit Management refinanced $1,177,160,000 of notes from the ALM XIV Ltd. transaction, according to a market source.

ALM XIV sold $930 million of class A-1-R floating-rate notes at par to yield Libor plus 115 bps at the top of the three-part deal.

BofA Merrill Lynch was the refinancing agent.

Apollo Credit Management (CLO) will continue to manage the CLO.

The New York City-based subsidiary of Apollo Global Management, LLC priced two new CLOs and refinanced two vintage CLO transactions in 2016.

Brigade Capital refinances

Brigade Capital Management refinanced $359 million of fixed- and floating-rate notes due Oct. 17, 2026 in the vintage 2014 CLO offering, according to a market source.

Battalion CLO VI Ltd./Battalion CLO VI LLC sold $290.8 million of class A-1-R floating-rate notes at par to yield Libor plus 118 bps in the senior tranche.

Goldman Sachs & Co. arranged the offering.

Brigade Capital Management will remain as the CLO manager.

Brigade Capital Management has refinanced four CLOs year to date.

The New York City-based investment advisor firm priced one new CLO transaction in 2016.

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