THL Credit Advisors prices $616.25 million CLO; Anchorage Capital CDO attracts interest

By Cristal Cody

Tupelo, Miss., June 18 – Details emerged on the new CLO deal from THL Credit Advisors LLC, which brought $616.25 million of notes.

In other market activity, Moody’s Investors Service said that Anchorage Capital Group, LLC’s $540 million Anchorage Credit Funding 1, Ltd./Anchorage Credit Funding 1, LLC CDO deal that closed on June 9 demonstrates an appetite for unsecured credit risk.

The deal is collateralized primarily by corporate bonds and loans.

“ACF 1 can buy up to 100% bonds and up to 65% second-lien loans, unsecured loans and other non-first-lien senior secured assets,” Moody’s said in a CLO report. “The typical CLO 2.0 requires at least 90% of its collateral to be first-lien senior secured loans and senior secured notes. And although the vast majority of collateralized loan obligations issued since 2014 prohibit bond investments entirely in order to comply with the Volcker Rule, ACF 1’s emergence could be a sign that bonds are becoming more attractive amid the waning leveraged loan supply.”

Bonds have fixed rates and typically offer higher yields than floating-rate loans, the report notes.

“As a result, ACF 1 will generate more excess spread than typical CLOs,” Moody’s said.

Anchorage Capital Group previously brought the $569.93 Anchorage Capital CLO 6, Ltd./Anchorage Capital CLO 6, LLC offering on March 11.

The New York City-based global asset manager brought three CLO transactions in 2014.

THL Credit prices CLO

THL Credit Advisors sold $616.25 million of notes due July 20, 2027 in the THL Credit Wind River 2015-1 CLO Ltd./THL Credit Wind River 2015-1 LLC transaction, according to a market source.

The CLO priced $384 million of class A senior secured floating-rate notes at Libor plus 150 basis points at the top of the capital structure.

Credit Suisse Securities (USA) LLC was the placement agent.

THL Credit Senior Loan Strategies LLC will manage the CLO.

The CLO has a two-year non-call period and a four-year reinvestment period.

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

Proceeds from the deal will be used to purchase a portfolio of about $600 million of mostly senior secured leveraged loans.

Boston-based THL Credit Advisors brought three CLO transactions in 2014.

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