Alcentra prices $415.25 million CLO; American Money brings deal; June pipeline strong

By Cristal Cody

Tupelo, Miss., June 9 – Primary action in the CLO market remained brisk on Monday following a rush of deals in the previous week, including the largest offering since the financial crisis, sources said.

Alcentra NY LLC was in the market with a $415.25 million CLO offering, according to a market source.

The CLO priced the AAA-rated tranche at Libor plus 150 basis points, on the wider side of the range of recent issuance.

American Money Management Corp. raised $410.3 million in the AMMC CLO XIV, Ltd./AMMC CLO XIV, Corp. transaction, according to market sources.

The CLO placed the AAA tranche at Libor plus 145 bps.

“CLO new issuance has been brisk so far this year, but we believe AAA spreads will need to rally for this pace to continue,” Barclays analysts said in a note. “The increased availability of financing could help, as would an increase in Libor, as AAAs do not look nearly as cheap in yield terms as they do in spread terms.”

CLO managers priced more than $4 billion of CLOs in the U.S. and European markets in the previous week, according to market sources.

Apollo Credit Management (CLO) LLC sold $1.54 billion of notes in the ALM XIV, Ltd. CLO transaction.

More than $50 billion of CLOs have priced year to date, according to data collected by Prospect News.

The pipeline remains strong with more than $14 billion of CLOs in the works, a market source said.

Alcentra prices CLO

Alcentra NY priced $415.25 million of notes due July 17, 2026 in the Shackleton 2014-VI CLO Ltd./Shackleton 2014-VI CLO LLC deal, according to a market source.

Shackleton 2014-VI CLO priced $250.5 million of class A floating-rate notes (/AAA/) at Libor plus 150 bps, $20 million of class B-1 floating-rate notes (/AA/) at Libor plus 215 bps and $30 million of 4.4% class B-2 fixed-rate notes (/AA/).

The CLO also sold $31.25 million of class C deferrable floating-rate notes (/A/) at Libor plus 310 bps, $20.75 million of class D deferrable floating-rate notes (/BBB/) at Libor plus 360 bps, $16.5 million of class E deferrable floating-rate notes (/BB/) at Libor plus 500 bps and $10 million of class F deferrable floating-rate notes (/B/) at Libor plus 575 bps.

The deal included $36.25 million of subordinated notes in the equity tranche.

BofA Merrill Lynch was the placement agent.

Alcentra NY will manage the CLO, which is backed primarily by broadly syndicated senior secured loans.

The CLO is non-callable until July 17, 2016. The reinvestment period ends July 17, 2018.

Alcentra was last in the market on April 8 with the $627 million Shackleton 2014-V CLO Ltd./Shackleton 2014-V CLO LLC deal.

The New York City-based firm, a subsidiary of the Bank of New York Mellon Corp., priced two CLO transactions in 2013.

American Money prices

American Money Management priced $410.3 million of notes due 2026 in the AMMC CLO XIV transaction, according to market sources.

The CLO sold $256 million of class A-1L floating-rate notes (//AAA) at Libor plus 145 bps; $53 million of class A-2 L floating-rate notes at Libor plus 205 bps; $23.25 million of class A-3L floating-rate notes at Libor plus 280 bps; $17.25 million of class B-1L floating-rate notes at Libor plus 355 bps; $20 million of class B-2L floating-rate notes at Libor plus 480 bps and $40.8 million of subordinated notes.

RBS Securities Inc. arranged the transaction.

The CLO manager is American Money Management.

The managed cash flow CLO is backed primarily by broadly syndicated first-lien senior secured loans.

The CLO will have a two-year non-call period and a four-year reinvestment period.

Proceeds from the transaction will be used to purchase a portfolio of leveraged loans.

Cincinnati-based American Money Management, a subsidiary of insurance holding company American Financial Group, Inc., priced two CLO deals in 2013.

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