Octagon prices $511.5 million new CLO, refinances $523.8 million 2013 notes; AAAs tighten

By Cristal Cody

Tupelo, Miss., July 31 – Octagon Credit Investors, LLC priced its second new CLO transaction of the year and refinanced its sixth vintage CLO year to date.

The CLO manager sold $511.5 million of notes in the new transaction.

Octagon Credit Investors priced $523.8 million of notes in a refinancing and reset of a vintage 2013 deal.

CLO refinancing volume totals more than $100 billion year to date, according to market sources.

In the secondary market, spreads tightened on the senior portion of the capital stack, according to a BofA Merrill Lynch research note.

“With no strong incentives to sell, the U.S. CLO secondary market continues to see moderate trading activities with $403 [billion] BWIC,” the analysts said.

AAA spreads firmed 5 basis points to head out on Friday at Libor plus 110 bps. A-rated spreads tightened 5 bps to the Libor plus 235 bps area.

Further down the capital stack, spreads were flat, the analysts said. BBs ended the week unchanged on Friday at Libor plus 550 bps.

Octagon prices $511.5 million

Octagon Credit Investors priced $511.5 million of notes due July 16, 2029 in the Octagon Investment Partners 32, Ltd./Octagon Investment Partners 32, LLC transaction, according to market sources.

The CLO sold $305 million of class A-1 senior secured floating-rate notes with a discount margin of Libor plus 118 bps.

Morgan Stanley & Co. LLC arranged the offering.

Octagon Credit Investors has priced two new CLOs and refinanced six 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.

Octagon refinances CLO

Octagon Credit Investors also sold $523.8 million of notes in a refinancing and reset of the vintage 2013 Octagon Investment Partners XV, Ltd./Octagon Investment Partners XV, LLC transaction, according to a market source and a notice of executed third supplemental indenture.

The CLO sold $278 million of class A-1A-R senior secured floating-rate notes at Libor plus 121 bps.

Citigroup Global Markets Inc. arranged the offering.

Octagon originally issued the CLO on Feb. 20, 2013.

The maturity on the refinanced notes was extended to July 19, 2030 from the original January 2025 due date.

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