CLO market welcomes victory over risk retention; Wellfleet refinances $370.81 million CLO

By Cristal Cody

Tupelo, Miss., May 11 – The CLO market celebrated a win Friday after the final deadline to appeal risk retention requirements passed on Thursday.

The 5% risk retention requirement for CLO managers under the Dodd-Frank Act was struck down following a lawsuit from the Loan Syndications and Trading Association.

“This constitutes an important victory for the CLO market and we are delighted that this long journey has ended successfully,” LSTA said in a statement on Friday.

Elsewhere in pricing action, details emerged on Wellfleet Credit Partners, LLC’s $370.8 million refinancing of a 2016 CLO.

Wellfleet Credit Partners sold a total of $370,812,000 of notes due April 20, 2028 in the refinancing, according to a market source and a notice of executed first supplemental indenture on Thursday.

Wellfleet CLO 2016-1, Ltd./Wellfleet CLO 2016-1 LLC priced $260 million of the class A-R senior secured floating-rate notes at Libor plus 91 basis points.

Morgan Stanley & Co. LLC arranged the offering.

The original $358.5 million Wellfleet CLO 2016-1 transaction priced March 11, 2016 and sold $227.5 million of the class A floating-rate notes at Libor plus 175 bps.

Greenwich, Conn.-based Wellfleet Credit Partners is a performing credit arm created in 2015 by private investment firm Littlejohn & Co., LLC.

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