325 Fillmore sells CLO; Octagon refinances $279.8 million; strong refinancing pace likely

By Cristal Cody

Tupelo, Miss., May 19 – In new CLO primary activity, 325 Fillmore LLC sold $159.4 million of notes in eight tranches.

Looking at the refinancing market, Octagon Credit Investors, LLC refinanced $279.8 million of notes from a vintage 2014 CLO in its fourth refinancing transaction of the year.

CLO refinancing action is expected to stay strong through 2017, Moody’s Investors Service said in its May CLO report.

“We also expect reset activity to continue at a strong pace,” Moody’s said. “If CLO spreads remain at or lower than current levels, we expect refinancing activity to remain strong for U.S. CLOs and accelerate among European CLOs in 2017 as more deals exit their non-call periods.”

More than $75 billion of vintage CLOs have been refinanced year to date, according to market sources.

About $25 billion of new CLOs have priced so far in 2017.

325 Fillmore prices

325 Fillmore sold $159.4 million of notes due July 20, 2029 in a broadly syndicated CLO deal, according to a market source.

Peaks CLO 2, Ltd. priced $69.21 million of class A-1 senior secured floating-rate notes at Libor plus 225 basis points in the senior tranche.

Guggenheim Securities LLC arranged the refinancing.

Proceeds from the transaction will be used to purchase a portfolio of about $150 million of mostly leveraged loans and syndicated middle market loans.

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

325 Fillmore is an affiliate of Denver-based ArrowMark Colorado Holdings LLC, formerly known as Arrowpoint Asset Management, LLC.

Octagon refinances

Octagon Credit Investors refinanced $279.8 million of notes due Nov. 18, 2026 in the vintage 2014 Octagon Loan Funding, Ltd./Octagon Loan Funding, LLC transaction, according to a notice of executed first supplemental indenture on Friday.

The CLO sold $202 million of class A-1-R senior secured floating-rate notes at Libor plus 114 bps at the top of the capital stack.

GreensLedge Capital Markets LLC arranged the offering.

In the original transaction priced on Aug. 26, 2014, the CLO sold the $202 million tranche of class A-1 floating-rate notes at Libor plus 145 bps.

Proceeds were used to redeem the original class A-1, A-2, B-2 and D notes.

Octagon Credit Investors has refinanced four vintage CLOs year to date.

The CLO manager priced three new CLOs and refinanced one CLO in 2016.

The New York-based credit investment firm is a subsidiary of Conning & Co.

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