KKR offers $506 million CLO; new supply lags refinancing pace; secondary market volume up

By Cristal Cody

Tupelo, Miss., Feb. 10 – KKR Financial Advisors II, LLC is marketing $506 million of notes in a new CLO transaction.

New issuance has lagged behind the strong refinancing pace year to date, according to market sources. More than $3.5 billion of new CLOs have priced, while about $10 billion of vintage CLOs have been refinanced in 2017.

Trading volume rose in the securitized secondary market on Thursday. During the session, $149.6 million of high-grade CBO/CDO/CLO issues and $239.4 million of non-investment-grade issues traded, according to Trace.

KKR Financial Advisors II plans to price $506 million of notes due March 15, 2029 in the KKR CLO 17 Ltd./KKR CLO 17 LLC transaction, according to a market source.

The deal includes $325 million of class A senior secured floating-rate notes (Aaa); $53.75 million of class B senior secured floating-rate notes (Aa2); $26.25 million of class C senior secured deferrable floating-rate notes (A2); $32.5 million of class D senior secured deferrable floating-rate notes (Baa3); $22.5 million of class E senior secured deferrable floating-rate notes (Ba3) and $46 million of subordinated notes.

Barclays is the placement agent.

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

The transaction is expected to close on March 31.

KKR priced three new U.S. CLOs and refinanced one vintage U.S. CLO transaction in 2016.

The investment firm is a subsidiary of KKR Credit Advisors (US) LLC.

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