KKR Financial Advisors prices $402 million CLO; strong middle-market CLO volume eyed

By Cristal Cody

Tupelo, Miss., Feb. 11 – Several new broadly syndicated CLO offerings are expected to price in both the U.S. and European primary markets, according to sources on Monday.

Meanwhile, details emerged on KKR Financial Advisors II, LLC’s $402 million offering of notes in its first CLO offering of the year.

“After a relatively light January in gross CLO issuance, primary market activity seems to be picking up with at least 10 deals in premarketing as of writing,” BofA Merrill Lynch analysts said in a note released on Monday.

In addition to steady broadly syndicated deal volume, the middle-market space is expected to see “another year of robust issuance,” the analysts said.

CLO middle-market volume is forecast to total in the $10 billion to $15 billion range for 2019, compared to $13.7 billion of issuance in 2018, according to the report.

In its deal, KKR Financial Advisors II priced $402 million of notes due April 20, 2032 in the KKR CLO 24 Ltd./KKR CLO 24 LLC transaction, according to market sources.

The CLO sold $247 million of class A-1 floating-rate notes at Libor plus 136 bps and $13.2 million of class A-2 floating-rate notes at Libor plus 170 bps at the top of the capital structure.

Citigroup Global Markets Inc. was the placement agent.

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