BlueMountain, Feingold O'Keefe price CLO deals; investors expect AAA securities to firm

By Cristal Cody

Tupelo, Miss., March 24 - Year-to-date issuance in the collateralized loan obligation market climbed to more than $20 billion following transactions from managers including BlueMountain Capital Management LLC and Feingold O'Keefe Capital, LLC, according to informed sources on Monday.

BlueMountain Capital Management priced the AAA-rated tranche at Libor plus 152 basis points.

Feingold O'Keefe placed the AAA securities in the Staniford Street CLO Ltd./Staniford Street CLO LLC offering at Libor plus 153 bps.

CLO AAA tranches have priced on average at Libor plus 150 bps in 2014, according to market sources.

"Most investors expect new issue CLO AAA spreads to end the year somewhere in the range of 125 bps to 150 bps," Morgan Stanley & Co. LLC analysts said in a note.

BlueMountain taps market

BlueMountain Capital Management sold $513,225,000 of notes due April 30, 2026 in the BlueMountain CLO 2014-1 Ltd./BlueMountain CLO 2014-1 LLC deal, according to an informed source.

The CLO priced $321.25 million of class A senior secured floating-rate notes (/AAA/) at Libor plus 152 bps; $30 million of class B-1 senior secured floating-rate notes (/AA/) at Libor plus 200 bps; $20 million of 4.5% class B-2 senior secured fixed-rate notes (/AA/); $41.25 million of class C deferrable floating-rate notes (/A/) at Libor plus 275 bps; $26,875,000 of class D deferrable floating-rate notes (/BBB/) at Libor plus 345 bps; $21.25 million of class E deferrable floating-rate notes (/BB/) at Libor plus 475 bps; $15 million of class F deferrable floating-rate notes (/B/) at Libor plus 550 bps and $37.6 million of subordinated notes.

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

BlueMountain Capital Management will manage the CLO.

The private investment firm, located in New York and London, priced three CLO deals in 2013.

Feingold sells $414 million

Feingold O'Keefe Capital sold $414 million of notes due June 15, 2025 via StormHarbour Securities LP, according to an informed source.

The Staniford Street CLO priced $255 million of class A senior secured floating-rate notes (AAA/) at Libor plus 153 bps; $45 million of class B senior secured floating-rate notes (/AA/) at Libor plus 225 bps; $30 million of class C deferrable floating-rate notes (/A/) at Libor plus 305 bps; $23 million of class D deferrable floating-rate notes (/BBB/) at Libor plus 350 bps; $17.5 million of class E deferrable floating-rate notes (/BB/) at Libor plus 450 bps; $12.5 million of class F deferrable floating-rate notes at Libor plus 500 bps and $31 million of subordinated notes.

Feingold O'Keefe will manage the CLO.

The Boston-based alternative asset investment firm priced the $515 million Longfellow Place CLO 2013-1, Ltd. transaction in January 2013, its first CLO deal since 2007.

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