GSO/Blackstone sells $413.35 million CLO; Alcentra in pipeline; AAA, AA spreads 'wide'

By Cristal Cody

Tupelo, Miss., Nov. 5 - GSO/Blackstone Debt Funds Management, LLC kept the CLO primary market active on Tuesday with the $413.35 million Keuka Park CLO, Ltd./Keuka Park CLO, LLC transaction in its fifth CLO deal of the year, according to an informed source.

The CLO sold the AAA slice at Libor plus 145 basis points, while the tranche of B2-rated notes came at Libor plus 495 bps.

"Spreads are still wide for AAAs and AAs, but have tightened slightly for the rest of the capital structure," a market source said.

CLO issuance has climbed to more than $65 billion year to date, and market sources project about $70 billion of total annual U.S. deals.

"I expect more than $5 billion more of CLOs to price between now and year-end," one source said.

A new deal from Alcentra NY LLC joins the pipeline. The firm plans to price a $413.85 million CLO, according to an informed source.

GSO/Blackstone prices

GSO/Blackstone Debt Funds Management sold $413,349,000 of notes due 2024 in the Keuka Park CLO transaction on Tuesday, according to an informed source.

The CLO priced $246 million of class A senior secured floating-rate notes (Aaa/AAA/) at par to yield a spread of Libor plus 145 bps; $10 million of class B-1 senior secured floating-rate notes (Aa2) at 98.98469 to yield Libor plus 170 bps and $36 million of 4.018% class B-2 senior secured fixed-rate notes (Aa2) at 99.03429 at the top of the capital structure.

In the rest of the structure, the CLO sold $33 million of class C secured deferrable floating-rate notes (A2) at 96.98711 to yield Libor plus 255 bps; $22 million of class D secured deferrable floating-rate notes (Baa3) at 93.77236 to yield Libor plus 320 bps; $22.5 million of class E secured deferrable floating-rate notes (Ba3) at 89.78442 to yield Libor plus 450 bps and $7 million of class F secured deferrable floating-rate notes (B2) at 86.06173 to yield Libor plus 495 bps.

The deal also included $36,849,000 of subordinated notes in the equity tranche.

Wells Fargo Securities LLC arranged the transaction.

GSO/Blackstone will manage the CLO, which is backed by broadly syndicated senior secured loans to corporate borrowers.

The New York City-based asset management firm, an affiliate of the Blackstone Group LP, has priced four other CLOs in 2013 that include the $520 million Adirondack Park CLO Ltd./Adirondack Park CLO Corp. and the $727.33 million Sheridan Square CLO Ltd./Sheridan Square CLO LLC deals that closed in March; the $515.95 million Tryon Park CLO, Ltd./Tryon Park CLO Corp. offering in June and the $519 million Emerson Park CLO, Ltd. transaction in August.

Alcentra prepares CLO

Alcentra plans to sell $413.85 million of notes due December 2024 in the Shackleton 2013-IV CLO Ltd./Shackleton 2013-IV CLO LLC transaction, according to an informed source.

The deal includes $250.1 million of class A senior secured floating-rate notes (Aaa/AAA/); $46.4 million of class B senior secured floating-rate notes (/AA/); $33.4 million of class C mezzanine secured deferrable floating-rate notes (/A/); $20.3 million of class D mezzanine secured deferrable floating-rate notes (/BBB/); $17.1 million of class E junior secured deferrable floating-rate notes (/BB/); $10.7 million of class F junior secured deferrable floating-rate notes (/B/) and $35.85 million of subordinated notes.

J.P. Morgan Securities LLC is the placement agent.

Alcentra NY, a sub-investment-grade debt manager and subsidiary of the Bank of New York Mellon Corp., will manage the CLO.

The deal is expected to close in December.

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