Tryon Park CLO, Avery Point II CLO close; new issue market light on week; spreads wider

By Cristal Cody

Tupelo, Miss., June 20 - New issuance in the collateralized loan obligation market slowed over the week as expected, while the pipeline remains filled with new deals forecast from 'tier one' names, according to market sources.

"There's nothing really much this week," one source said. "We've seen one deal."

BlueMountain Capital Management LLC sold a $428.75 million CLO offering of notes due Jan. 15, 2025 on Tuesday.

BlueMountain CLO 2013-2 Ltd./BlueMountain CLO 2013-2 LLC priced $259,725,000 of class A floating-rate notes (/AAA/) at Libor plus 125 basis points, wider than where triple A-rated tranches priced in late May, according to informed sources.

Spreads have eased since GSO Capital Partners LP and Sankaty Advisors LLC priced new CLOs the last week of May, according to market sources on Thursday.

"Marginally, it's about 10 basis points wider," a source said.

GSO Capital Partners sold a $308 million tranche of class A-1 senior secured floating-rate notes (Aaa/AAA) at Libor plus 112 bps and a $67 million class A-2 tranche of senior secured floating-rate notes (/AA/) at Libor plus 155 bps.

Sankaty Advisors' Avery Point II CLO Ltd./Avery Point II CLO Corp. priced $304 million of class A floating-rate notes (/AAA/AAA) at Libor plus 111 bps and $46 million of class B-1 notes (/AA/) at Libor plus 155 bps.

Tryon Park CLO closes

GSO Capital Partners' $515 million CLO offering of notes due July 15, 2025 closed on Thursday.

In addition to the class A-1 and class A-2 tranches, Tryon Park CLO, Ltd./Tryon Park CLO Corp. sold $35.5 million of class B senior secured deferrable floating-rate notes (/A/) at Libor plus 260 bps; $27.2 million of class C senior secured deferrable floating-rate notes (/BBB/) at Libor plus 350 bps; $23.8 million of class D senior secured deferrable floating-rate notes (/BB/) at Libor plus 440 bps; $9.7 million of class E senior secured deferrable floating-rate notes (/B/) at Libor plus 525 bps; and $44.75 million of subordinated notes, according to a market source.

Citigroup Global Markets Inc. was the placement agent.

GSO/Blackstone Debt Funds Management LLC is the CLO manager.

The CLO is backed by a revolving pool of broadly syndicated senior secured loans and has a two-year non-callable period.

Avery Point II CLO settles

Sankaty Advisors closed Thursday on the $516.75 million total CLO offering of notes due July 17, 2025, according to market sources.

In the deal, Avery Point II CLO also priced $25 million of 3.21% class B-2 fixed-rate notes (/AA/); $36 million of class C deferrable notes (/A/) at Libor plus 275 bps; $26 million of class D notes (/BBB/) at Libor plus 345 bps; $24 million of class E notes (/BB/) at Libor plus 425 bps; $13.5 million of class F notes (/B/) at Libor plus 510 bps; and $42.25 million of subordinated notes.

Merrill Lynch, Pierce, Fenner & Smith Inc. was the underwriter.

Boston-based Sankaty Advisors, the credit investment unit of Bain Capital LLC, is the CLO manager.

Proceeds will be used to purchase a portfolio of about $500 million of primarily leveraged loans.

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