Sound Point, Invesco, Apex, CSAM, Alcentra, Carlyle price; U.S., euro CLO spreads tighten

By Cristal Cody

Eureka Springs, Ark., July 18 – The CLO primary market is heating up post-Brexit in the U.S. and European markets, while spreads also are stronger in the secondary market, according to sources on Monday.

Sound Point Capital Management LP priced $722.5 million of notes in one of the largest offerings of the year.

Invesco RR Fund, LP placed a $408 million CLO deal.

Apex Credit Partners LLC brought $353.5 million notes in the JFIN CLO 2016 Ltd./JFIN CLO 2016 LLC offering.

Also, Credit Suisse Asset Management, LLC sold $814 million of notes in the Madison Park Funding XXI Ltd. transaction. Final pricing details were not available by press time.

In addition, Carlyle Investment Management LLC refinanced a $155 million tranche from a vintage 2014 CLO.

In the European primary market, Alcentra Ltd. priced €414.5 million of notes due 2029 in the Jubilee CLO 2016-XVII BV transaction via Morgan Stanley & Co. International plc. Final pricing details were not available by press time.

The U.S. CLO market continued to rally post-Brexit with 3.0 spreads tightening 5 basis points to 25 bps across the capital structure over the past week, J.P. Morgan Securities LLC analysts said in a note.

“This could be a result of investors putting idle cash to work, with investor cash positioning at the highest levels since 2012,” the analysts said.

BWIC volumes were moderate at about $410 million and “bidding activity was strong with investors looking to add exposure,” according to BofA Merrill Lynch analysts.

In the 2.0/3.0 space, spread levels tightened 5 bps to 75 bps over the past week with AAAs ending 5 bps better at Libor plus 150 bps, the analysts said in a note.

Euro-denominated CLO AAA spreads ended the previous week 5 bps tighter at Euribor plus 140 bps.

“For European CLOs, trading volumes remained relatively low, as they have been for several weeks going into, and following the U.K.’s vote to leave the European Union,” the BofA Merrill Lynch analysts said. “However, as with broader credit markets, pricing performance generally remains strong and demand for 1.0 bonds appeared firm in particular.”

Sound Point prices CLO

Sound Point Capital Management priced $722.5 million of notes due Oct. 20, 2028 in the Sound Point CLO XII, Ltd./Sound Point CLO XII LLC transaction, according to a market source.

The CLO sold $451.5 million of class A floating-rate notes at Libor plus 166 bps at the top of the capital stack.

Credit Suisse Securities (USA) LLC was the placement agent.

The CLO is backed primarily by first-lien senior secured loans.

Proceeds will be used to purchase a $700 million portfolio of mostly senior secured leveraged loans.

Sound Point Capital has been in the primary market with two CLO deals in 2016.

The New York-based asset management firm priced three CLO transactions in 2015.

Invesco raises $408 million

Invesco RR Fund, an affiliate of Invesco Senior Secured Management, Inc., priced a $408 million CLO deal, according to a market source.

Annisa CLO, Ltd./Annisa CLO, LLC sold $256 million of class A floating-rate notes at par to yield Libor plus 155 bps in the senior tranche.

Barclays arranged the offering of notes due July 25, 2028.

Invesco RR Fund will manage the CLO and enter into a staffing and services agreement with Invesco Senior Secured Management to utilize the firm’s platform and affiliates for various services and resources.

The CLO is backed primarily by broadly syndicated first-lien senior secured leveraged loans.

Proceeds from the deal will be used to purchase a portfolio of about $400 million of mostly senior secured leveraged loans.

Invesco has priced two CLO offerings year to date.

The subsidiary of Atlanta-based Invesco, Ltd. brought two CLO transactions to market in 2015.

Apex taps market

Apex Credit Partners, a subsidiary of Jefferies Finance LLC, sold $353.5 million notes due Aug. 1, 2028 in the JFIN CLO 2016 deal, according to a market source.

JFIN CLO 2016 priced the $160.5 million tranche class A-1 senior secured floating-rate notes at Libor plus 175 bps.

Jefferies LLC was the placement agent.

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

Proceeds will be used to purchase a portfolio of about $350 million of mostly senior secured leveraged loans.

Jefferies Finance priced three U.S. CLO transactions in 2015.

The New York City-based commercial finance firm is co-owned by Jefferies Group LLC and Massachusetts Mutual Life Insurance Co.

Carlyle refinances

Carlyle Investment Management refinanced $155 million of notes due Aug. 18, 2026 in one tranche from a vintage 2014 CLO deal, according to a market source.

Carlyle Global Market Strategies CLO 2014-3, Ltd./Carlyle Global Market Strategies CLO 2014-3 LLC priced the class A-1B-R senior secured notes at Libor plus 145 bps.

The original class of A-1B notes priced at Libor plus 133.5 bps.

Citigroup Global Markets Inc. was the refinancing agent.

The remaining tranches in the deal were not refinanced. Carlyle originally sold $815.8 million of notes in the transaction on July 29, 2014.

The CLO is backed primarily by broadly syndicated first-lien senior secured corporate loans.

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

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

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