CLO pipeline fills; strong U.S., Europe first-quarter issuance forecast; CIFC top manager

By Cristal Cody

Tupelo, Miss., Jan. 22 – The CLO pipeline is beginning to fill, with the issuance expected to be strong over the next few months, market sources said.

Moody’s Investors Service said in a CLO report that so far in January it has assigned provisional ratings to eight U.S. transactions managed and backed primarily by portfolios of senior secured broadly syndicated loans.

“We are currently analyzing another 23 proposed U.S. CLOs, two of which are backed primarily by portfolios of small- and medium-enterprise loans,” Moody’s said. “Based on current deals in the pipeline, we anticipated first-quarter issuance will remain substantial but will not be as high as last quarter.”

European issuance is expected to remain strong in the first quarter and the rest of the year, according to the CLO report.

“We are currently analyzing eight BSL CLOs and a French SME CLO,” Moody’s said.

Appleby Global Group Services Ltd. said in a report released on Wednesday that it expects issuance over the first half of the year to be strong based on a pipeline of more than 30 warehoused deals.

In the near-term pipeline, PineBridge Investments LLC plans to offer $508.2 million of notes due 2027 in the Galaxy XIX CLO Ltd./Galaxy XIX CLO LLC transaction via Citigroup Global Markets Inc.

3i Debt Management U.S. LLC intends to bring a $610 million CLO deal via Citigroup.

Apollo Credit Management (CLO) LLC also is in the pipeline with an offering to be arranged by Morgan Stanley & Co.

CIFC top manager

CIFC Asset Management LLC, which manages 32 CLOs, is the top U.S. CLO manager by number of deals, Moody’s said in the report.

New York City-based CIFC brought five deals in 2014, according to data compiled by Prospect News.

By assets under management, Credit Suisse Asset Management, LLC leads with $13.1 billion under management, according to the report.

Blackstone/GSO Debt Funds Management Europe Ltd. manages the most European CLOs by both volume and deal count at 15 transactions totaling €4.5 billion, Moody’s said.

In 2014, the number of CLO managers rose to 143 from 133 in 2013, according to the report.

During the year, 11 first-time CLO managers closed 21 deals that totaled $8.5 billion, Moody’s said.

First-time managers in the market over the year included Los Angeles-based Bradford & Marzec LLC and Charlotte, N.C.-based Steele Creek Investment Management LLC.

Bradford & Marzec priced the $421.5 million B&M CLO 2014-1, Ltd./B&M CLO 2014-1, LLC deal on April 8, 2014, and Steele Creek Investment Management brought the $413.5 million Steele Creek CLO 2014-1 Ltd./Steele Creek CLO 2014-1, LLC deal on July 18, according to Prospect News data.

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