Broadly syndicated Golub CLO prints; Marathon refinances $463.17 million; CLO notes trade

By Cristal Cody

Tupelo, Miss., Aug. 20 – Primary and refinancing supply in the U.S. CLO markets remains steady in late August, though volume is beginning to thin.

Golub Capital affiliate GC Investment Management LLC priced $435.16 million of notes due July 2030 in a new broadly syndicated transaction. The company’s second new middle-market CLO deal of the year closed earlier in August.

In refinancing activity, Marathon Asset Management LP sold $463.17 million of notes in a reset of a vintage 2015 CLO.

In the secondary market last week, CLO bonds on BWIC lists “traded well, aided by a second straight week of relatively light primary market volume,” according to a BofA Merrill Lynch research note released on Monday.

“The wings of the capital structure were particularly well bid, with AAA/AA tranche spreads 3 [basis points] and 5 [bps] tighter [week over week], respectively, and BB/B spreads 5 [bps] and 10 [bps] tighter,” the note said.

CLO AAA-rated tranches are trading about 7 bps tighter in the Libor plus 105 bps area than the widest levels seen this year in mid-July, according to the market note. BB spreads, at the Libor plus 560 bps area, are about 50 bps tighter in the secondary market from the year’s wides.

GC Investment prices

GC Investment Management priced $435.16 million of notes due July 2030 in the new Golub Capital Partners CLO 37(B), Ltd./Golub Capital Partners CLO 37(B), LLC broadly syndicated transaction, according to market sources.

The CLO sold $248 million of class A-1 senior secured floating-rate notes at Libor plus 118 bps at the top of the capital stack.

The AAA-rated tranches priced with a combined weighted average discount margin of Libor plus 121 bps.

Wells Fargo Securities LLC was the placement agent.

OPAL BSL LLC will manage the CLO, which has a two-year non-call period and a five-year reinvestment period.

The CLO is backed mainly by broadly syndicated first-lien senior secured term loans.

In addition to the new broadly syndicated CLO, Golub Capital has priced two new middle-market CLOs and refinanced three vintage CLOs year to date.

In 2017, the New York-based middle market lender priced two CLO transactions.

Marathon refinances CLO

Marathon Asset Management sold $463.17 million of notes in a reset and refinancing of a vintage 2015 CLO offering, according to a market source.

Marathon CLO VIII Ltd./Marathon CLO VIII LLC priced $283.5 million of class A-1-R senior secured floating-rate notes at Libor plus 125 bps in the senior tranche.

BofA Merrill Lynch was the refinancing placement agent.

The maturity on the refinanced notes was extended to Oct. 18, 2031 from the original July 24, 2028 maturity.

In the original Marathon CLO VIII transaction that was issued July 24, 2015, the CLO priced $120 million of class A-1a senior secured floating-rate notes at Libor plus 149 bps.

Proceeds will be used to redeem the original notes.

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

Marathon Asset Management is a New York City-based global credit manager.

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