Brookside Mill sells $471.38 million; April deals hit $4 billion; Benefit Street plans CLO

By Cristal Cody

Prospect News, April 30 - Pricing action in the collateralized loan obligation market is quieter on the week, but a couple of deals are likely, according to market sources.

"We've gotten past a lot of the regulatory issues and some of the hesitancy we saw a few weeks ago, but it's not as robust as it was in the first quarter," a source said. "The pipeline of deals to come just needs time to rebuild itself."

Benefit Street Partners LLC plans to price its second collateralized loan obligation, a market source said.

The agency sold a $459 million offering, upsized from $360 million, via Citigroup Global Markets Inc. on Sept. 28.

Sources expect May and June to be busier with new issuance veering toward a slowdown in the summer months, as is typically seen across the financial markets.

In new issuance in April, Brookside Mill CLO Ltd./Brookside Mill CLO LLC priced $471.38 million of notes in a CLO, according to a market source.

"In April, there was just under $4 billion, and all those deals came in the last two weeks," another source said.

San Francisco-based JMP Group Inc. said on Tuesday that its previously announced $343.8 million collateralized loan obligation of senior secured notes closed.

"JMP Credit Advisors CLO II represents our reentry into the securitization market," Bryan Hamm, president of JMP Credit Advisors LLC, said in a statement.

The Rule 144A/Regulation S offering was sold in a private placement through JMP Credit Advisors CLO II Ltd./JMP Credit Advisors CLO II LLC.

JMP Credit Advisors LLC will manage the CLO, which is backed by broadly syndicated senior secured loans.

JMP Group said it is retaining $17.3 million, or 72.8% of the face amount issued, of the subordinated notes.

The CLO has a reinvestment period through Oct. 30, 2016 that allows for the use of proceeds from any principal repayments on, or any sales of, collateral assets towards the purchase of qualifying replacement assets.

Brookside Mill CLO deal

In primary activity, Brookside Mill CLO sold $471.38 million of notes due April 2025, according to a market source.

The deal included senior tranches of $2.25 million of class X notes (//AAA/) priced at Libor plus 90 basis points, $237 million of class A-1 floating-rate notes (//AAA) at Libor plus 115 bps and $40 million of class A-2 floating-rate notes (//AAA) at Libor plus 115 bps.

Merrill Lynch, Pierce, Fenner & Smith Inc. was the placement agent.

Shenkman Capital Management, Inc. will manage the CLO.

Proceeds will be used to purchase a $450 million portfolio of mostly senior secured leveraged loans.

Benefit Street Partners plans

Coming up, Benefit Street Partners is expected to price a $500 million CLO the week of May 6, according to a market source.

Benefit Street Partners is an affiliate of Providence, R.I.-based credit investment arm Providence Equity Capital Markets and private equity firm Providence Equity Partners LLC.

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