Ballyrock, MJX, Canyon, Cerberus sell CLOs; Carlyle resets; secondary spreads stable

By Cristal Cody

Eureka Springs, Ark., Aug. 22 – CLO pricing action remains steady in August, while spreads are mostly unchanged in the secondary market, according to sources on Monday.

New issuance in the broadly syndicated CLO primary market includes deals from Ballyrock Investment Advisors LLC, MJX Asset Management LLC and Canyon CLO Advisors LLC.

In addition, Carlyle Investment Management LLC raised $556.4 million in a reset refinancing transaction of a vintage CLO.

“We expect more refinancings/resets in the coming months after eight were priced since the beginning of June,” J.P. Morgan Securities LLC analysts said in a note. “Because resets would be prohibited for non-risk retention compliant CLOs after the risk retention compliance date, we anticipate more of these to come to market in the coming months.”

Year to date, $2.5 billion of U.S. CLOs have been refinanced, according to the note.

In the middle-market primary space, Cerberus Capital Management, LP priced a $415.7 million deal.

Secondary market activity remained strong, though spreads ended Friday unchanged on the week, according to BofA Merrill Lynch analysts.

“BWIC volume totaled close to $900 [million] and represents a close to 25% [week over week] increase,” the analysts said in a note. “Post-crisis tranches made up more than 90% of the volume and was heavily tilted toward the senior part of the capital stack. Not as much selling activity from fast-money accounts was seen this week and whatever came to the market continued to see healthy bidding from investors looking to add exposure.”

U.S. CLO 2.0/3.0 spreads ended Friday flat on the week across the capital stack, according to the note.

AAAs were stable at Libor plus 150 basis points, while BBBs traded unchanged at Libor plus 475 bps.

Ballyrock prices CLO

Ballyrock Investment Advisors priced a $354.11 million CLO deal, according to a market source.

Ballyrock CLO 2016-1 Ltd. sold $224 million of class A floating-rate notes at Libor plus 159 bps at the top of the capital structure.

Goldman Sachs & Co. arranged the offering.

The deal is the CLO manager’s first CLO transaction since 2014.

The investment management firm is based in Boston.

MJX prices CLO

MJX Asset Management priced a $525.45 million of notes and loans due Oct. 17, 2028 in the Venture XXIV CLO, Ltd. offering, according to a market source.

The CLO sold $129 million of class A-1D floating-rate notes at Libor plus 142 bps in the senior tranche.

Jefferies LLC was the placement agent.

MJX will manage the CLO.

The CLO, backed by broadly syndicated loans, has a two-year non-call period and a four-year reinvestment period.

MJX Asset Management has priced two CLO transactions year to date.

The New York City-based asset management company brought three new CLO deals and refinanced one vintage CLO in 2015.

Canyon taps market

Canyon CLO Advisors priced $460.8 million of notes due Aug. 20, 2028 in a new offering, according to a market source.

Canyon Capital CLO 2016-2, Ltd./Canyon Capital CLO 2016-2, LLC sold $288 million of class A senior secured floating-rate notes at Libor plus 150 bps in the senior tranche.

J.P. Morgan Securities LLC was the placement agent.

Canyon CLO Advisors will manage the CLO.

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

Proceeds will be used to purchase a portfolio of about $450 million of mostly senior secured leveraged loans.

The transaction is collateralized primarily by first-lien senior secured loans.

Canyon CLO Advisors has priced two CLO deals year to date.

The Los Angeles-based firm is a subsidiary of alternative asset manager Canyon Capital Advisors LLC.

Carlyle refinances

Carlyle Investment Management priced $556.4 million of notes due Oct. 4, 2028 at par in a reset refinancing transaction of its Carlyle Global Market Strategies CLO 2012-3, Ltd./Carlyle Global Market Strategies CLO 2012-3 LLC deal, according to a market source.

The CLO priced $391.5 million of class A-1-R senior secured floating-rate notes at Libor plus 145 bps in the AAA-rated slice.

Citigroup Global Markets Inc. was the refinancing agent.

The maturity on the refinanced notes was extended from the deal’s original maturity of Oct. 4, 2024.

Proceeds from the transaction will be used to redeem the original notes.

Carlyle Investment Management has refinanced tranches from three vintage CLOs and priced three new U.S. CLO deals year to date.

The asset management firm, an affiliate of the Washington, D.C.-based Carlyle Group, priced five U.S. broadly syndicated CLO transactions and one middle-market CLO offering in 2015.

Cerberus prices CLO

Cerberus Capital Management priced a $415.7 million middle-market CLO transaction, according to a market source.

Cerberus Loan Funding 2016-1 placed $69 million of class A-1T floating-rate notes at Libor plus 215 bps at the top of the capital stack.

Natixis Securities America LLC arranged the deal.

The New York-based firm priced one middle-market CLO transaction in 2015.

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