Babson prices $407 million CLO; secondary market ticks up in October, slips in November

By Rebecca Melvin

New York, Jan. 14 – Pricings in the CLO primary market have resumed this week after a hiatus lasting a week or so past the new year. Babson Capital Management LLC priced $407 million of notes in the firm’s first new U.S. collateralized loan obligation deal, and as previously report Voya Alternative Asset Management LLC is in the CLO deal pipeline with a $506.65 million offering.

Babson CLO 2016-I Ltd./Babson CLO 2016-I LLC sold $2.5 million of class X floating-rate notes at three-month Libor plus 100 basis points; $248 million of class A floating-rate notes at Libor plus 150 bps, $31 million of class B-1 floating-rate notes at Libor plus 230 bps, and $16 million of 4.2% class B-2 fixed-rate notes.

The CLO also priced $26.5 million of class C floating-rate notes at Libor plus 325 bps; $24.5 million of class D floating-rate notes at Libor plus 385 bps; $22 million of class E floating-rate notes at Libor plus 655 bps and $36.5 million of subordinated notes.

The notes mature in April 2027.

Morgan Stanley & Co. LLC was the placement agent.

In the secondary market, CLO portfolio loan trading by volume ticked up in October in opposition to the general trend in which the trajectory of CLO portfolio loan trading volume was downward since May, according to analysis published this week by Wells Fargo Securities.

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