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, compared to more than $26 billion of refinancing supply in the same period a year ago, according to a BofA Merrill Lynch research note.

Mountain View CLO closes

Seix Investment Advisors priced $404.66 million of notes due April 2029 in the CLO offering that closed on Monday, according to market sources.

Mountain View CLO XIV, Ltd./Mountain View CLO XIV, LLC sold $252 million of class A-1 senior secured floating-rate notes at Libor plus 144 basis points at the top of the capital stack.

BNP Paribas Securities Corp. was the placement agent.

The transaction includes an applicable margin reset feature that allows the notes to be refinanced via a modified Dutch auction.

The CLO is collateralized mainly by broadly syndicated senior secured corporate loans.

Seix Investment Advisors is an Upper Saddle River, N.J.-based firm that is indirectly owned by SunTrust Banks Inc.

KKR offers $406.3 million CLO

KKR Financial Advisors II intends to price $406.3 million of notes due April 15, 2032 in the KKR CLO 25 Ltd./KKR CLO 25 LLC transaction, according to a market source.

The deal includes $250 million of class A-1 senior secured floating-rate notes (Aaa); $12 million of class A-2 senior secured floating-rate notes (non-rated//); $30.4 million of class B-1 senior secured floating-rate notes (Aa2); $10 million of class B-2 senior secured fixed-rate notes (Aa2); $21.2 million of class C senior secured deferrable floating-rate notes (A2); $24.2 million of class D senior secured deferrable floating-rate notes (Baa3); $23.2 million of class E senior secured deferrable floating-rate notes (Ba3) and $35.3 million of subordinated notes.

GreensLedge Capital Markets LLC is the placement agent.

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

The transaction is expected to close May 14.

KKR is an investment firm and subsidiary of San Francisco-based KKR Credit Advisors (US) LLC.

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