THL, Fortress, Brigade, Western Asset, NewStar refinance CLOs; reissue supply on tap

By Cristal Cody

Tupelo, Miss., July 23 – CLO refinancings are picking up steam in July with volume expected to remain heavy over the year, according to market sources on Monday.

THL Credit Advisors LLC refinanced $552 million of notes from a 2016 CLO.

Fortress Investment Group LLC sold $379.3 million of notes in a refinancing and reset of 2015 deal.

Brigade Capital Management, LLC priced $377 million of notes in a second refinancing and reset of a 2014 CLO.

Western Asset Management Co. Ltd. refinanced $259.18 million of notes from a 2013 CLO.

NewStar Financial, Inc. repriced $245.25 million of notes in a middle-market CLO.

Also, PGIM, Inc. priced $63 million of notes in a refinancing of two tranches from the Dryden 43 Senior Loan Fund/Dryden 43 Senior Loan Fund LLC deal.

“Although there may be a short summer reprieve in the near term, we expect U.S. CLO refi, reset and reissue supply to remain at elevated levels across the rest of 2018,” BofA Merrill Lynch analysts said in a note released on Monday. “In short, supply is likely to continue to hurt and place technical pressure on U.S. CLO spreads.”

The market currently has about $150 billion of CLOs that are callable, according to the note.

THL refinances $552 million

THL Credit Advisors priced $552 million of notes due July 2028 in a refinancing of the THL Credit Wind River 2016-1 CLO Ltd./THL Credit Wind River 2016-1 LLC transaction, according to a market source and a notice of executed first supplemental indenture on Friday.

The CLO sold $384 million of class A-R senior secured floating-rate notes at Libor plus 105 basis points in the senior tranche.

J.P. Morgan Securities LLC arranged the offering.

The CLO originally was issued as a $608.3 million deal on June 22, 2016. In that offering, the CLO priced $384 million of the class A floating-rate notes at Libor plus 165 bps.

Proceeds will be used to redeem the original notes.

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

THL has priced one new CLO and refinanced one vintage CLO year to date.

In 2017, THL Credit Advisors priced four new CLOs and refinanced six vintage CLOs.

The Boston-based alternative credit investment firm priced two new CLOs and one refinanced CLO in 2016.

Western Asset reprints

Western Asset Management refinanced $259,184,790 of floating-rate notes due July 20, 2024 from the vintage 2013 Mountain Hawk II CLO Ltd. broadly syndicated transaction, according to a market source and a notice of executed supplemental indenture on Friday.

The CLO sold $149,184,790 of class A-1-R senior secured floating-rate notes at Libor plus 82 bps at the top of the capital stack.

Citigroup Global Markets Inc. was the refinancing agent.

In the original transaction issued July 9, 2013, the CLO sold $270.5 million of class A-1 floating-rate notes at Libor plus 116 bps.

Proceeds from the refinancing will be used to redeem the original notes.

Western Asset Management is a fixed income investment firm based in Pasadena, Calif.

Fortress resets CLO

Fortress Investment Group sold $379.3 million of notes in a refinancing and reset of a vintage 2015 CLO transaction, according to a market source and a notice of executed supplemental indenture on Monday.

Fortress Credit BSL VI Ltd./Fortress Credit BSL VI LLC, formerly known as Hildene CLO IV, Ltd./Hildene CLO IV LLC, priced $315 million of class A-R senior secured floating-rate notes at Libor plus 115 bps in the AAA-rated tranche.

Goldman Sachs & Co. LLC was the refinancing placement agent.

The CLO manager is CF H-BSL CLO Management LLC.

The maturity on the notes was extended to July 23, 2031 from the original July 22, 2027 maturity.

In the original $358.3 million deal that was issued Aug. 4, 2015, the CLO priced $206.5 million of the class A-1A floating-rate notes at Libor plus 150 bps.

Proceeds will be used to redeem the original notes.

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

Fortress Investment is a New York City-based investment firm.

Brigade reprints second time

Brigade Capital Management priced $377 million of notes in a second refinancing and reset of a vintage 2014 CLO offering, according to a market source and a notice of executed second supplemental indenture.

Battalion CLO VII Ltd./Battalion CLO VII LLC placed the $260 million of class A-1-RR senior secured floating-rate notes at Libor plus 104 bps.

BofA Merrill Lynch was the refinancing placement agent.

The maturity on the notes was extended to July 17, 2028 from the original Oct. 17, 2026 maturity.

The original securities were issued Nov. 19, 2014. The CLO had sold $252 million of class A-1 senior secured floating-rate notes at Libor plus 160 bps.

The CLO was first refinanced April 17, 2017. In that transaction, the CLO had priced $252 million of the class A-1-R floating-rate notes at par to yield Libor plus 119 bps.

Proceeds were used to redeem the outstanding notes.

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

The investment adviser firm is based in New York.

NewStar reprices CLO

NewStar Financial sold $245.25 million of notes due Jan. 20, 2027 in a refinancing of a middle-market CLO, according to a market source and a notice of executed second supplemental indenture on Monday.

NewStar Exeter Fund CLO Ltd. deal was previously issued Feb. 19, 2015 by Fifth Street CLO Management LLC under the CLO vehicle Fifth Street Senior Loan Fund I LLC.

NewStar Exeter Fund CLO priced $172.5 million of class A-R senior secured floating-rate notes at Libor plus 118 bps at the top of the capital structure.

Wells Fargo Securities LLC arranged the offering.

The original $309.45 million CLO sold $172.5 million of class A floating-rate notes at Libor plus 200 bps.

Proceeds were used to redeem the original notes.

The deal is collateralized by small and medium enterprise loans.

Boston-based NewStar acquired the Fifth Street CLO Management firm in 2017.

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