American Money Management refinances $388.5 million CLO; BB notes strong in secondary

By Cristal Cody

Eureka Springs, Ark., April 1 – American Money Management Corp. refinanced $388.5 million of notes from a vintage 2011 CLO deal in the first full refinanced transaction of 2016.

The firm priced six tranches of notes in the deal and placed the AAA-rated notes at Libor plus 158 basis points.

Previously this year, Apollo Credit Management (CLO) LLC refinanced a $120 million AAA-rated tranche in the vintage 2013 CLO vehicle, ALM VIII, Ltd./ALM VIII LLC, on Feb. 25.

The CLO primary market is improving but is “not open for many issuers,” Wells Fargo Securities LLC analysts said in a note on Friday.

CLO spreads remain tight with the secondary market a “seller’s market,” especially for BB-rated notes, according to the note.

“CLO spreads down the capital stack retraced in March from the wides seen in February; U.S. 2.0 BB spreads are 200 bps-300 bps tighter than the mid-February peak,” the analysts said.

American Money Management refinanced $388.5 million of notes due Jan. 15, 2022 in the AMMC CLO IX, Ltd. transaction, according to a market source.

The CLO priced $270 million of class A-R senior secured floating-rate notes at Libor plus 158 bps at the top of the capital structure.

The original class A notes priced at Libor plus 165 bps.

Citigroup Global Markets Inc. was the refinancing agent.

The CLO was restructured to include a two-year reinvestment period extension.

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