Seix prices $404.66 million CLO; KKR to return to primary market; reissue supply light

By Cristal Cody

Tupelo, Miss., March 26 – Seix Investment Advisors LLC priced $404.66 million of notes in a new CLO deal that included a feature that allows the notes to be refinanced via a modified Dutch auction.

In other action, KKR Financial Advisors II, LLC plans a return to the primary market with its second new CLO issuance of the year. KKR is marketing a $406.3 million offering. The CLO manager’s $402 million KKR CLO 24 Ltd./KKR CLO 24 LLC transaction closed on March 12.

Meanwhile, Moody’s Investors Service analysts said in a March CLO report that about half of the U.S. “CLOs we rate have been refinanced at least once.”

Although CLO refinancing volume is expected to be lower in 2019, “resets will continue to play an important and ongoing role in the CLO market,” the report said.

“Resets provide a way to respond to fluctuating issuance spreads and investor demand for specific duration profiles and are relatively cost effective,” Moody’s said. “Significant refinancing activity of the past two years coupled with relatively high current new issuance spreads will constrain 2019 reset volume.”

So far, about $7 billion of vintage CLOs have been refinanced, reset or reissued year to date, according to a BofA Merrill Lynch research note.

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