Apollo prices $1.11 billion; CIFC prints AAAs at Libor plus 142 bps; secondary thin

By Cristal Cody

Tupelo, Miss., July 20 – New CLO primary action includes a $1,111,850,000 deal from Apollo Credit Management (CLO) LLC, while details emerged Monday on CIFC Asset Management LLC’s $515.7 million transaction.

Global CLO issuance has reached nearly $85 billion year to date, according to data compiled by Prospect News.

Secondary trading activity has been light with total U.S. BWIC volumes of less than $250 million over the previous week, BofA Merrill Lynch analysts said in a note.

“Over the last month, U.S. 2.0 spreads have widened out by 5-75 [bps],” the analysts said. “Before further economic data releases introduce new rounds of volatility as we edge closer to the Fed’s lift-off, we believe securitized product spreads should retrace at least part of the recent widening in the near term.”

Trading volumes also remained light in the European CLO secondary market with about €25 million of bonds on BWIC lists in the previous week, according to the BofA Merrill Lynch note.

“Weekly BWIC volumes have remained comfortably below €100 [million] since early May, well below the weekly average of around €150 [million] over the last few years,” the analysts said.

Apollo prices $1.11 billion

Apollo Credit Management priced $1,111,850,000 of notes due July 15, 2027 in a new collateralized loan obligation deal, according to a market source.

ALM XVI, Ltd./ALM XVI LLC sold $715 million of class A-1 senior secured floating-rate notes at Libor plus 146 basis points at the top of the capital structure.

J.P. Morgan Securities LLC was the deal arranger.

Apollo Credit Management is the CLO manager.

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

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

Proceeds from the offering will be used to purchase assets to reach a target portfolio of about $1.1 billion of mainly senior secured leveraged loans.

Apollo Credit Management previously priced the $786.2 million ALM XII, Ltd./ALM XII, LLC CLO on Jan. 26 and refinanced $475 million of notes in the ALM VI, Ltd./ALM VI LLC deal on June 3.

The New York City-based subsidiary of Apollo Global Management, LLC brought two U.S. CLO deals in 2014.

CIFC deal details

CIFC Asset Management sold $515.7 million of notes due July 16, 2027 in the CIFC Funding 2015-III, Ltd./CIFC Funding 2015-III, LLC transaction, according to a market source.

The CLO priced $325 million of class A senior secured floating-rate notes at Libor plus 142 bps in the AAA-rated slice.

BNP Paribas Securities Corp. was the placement agent.

CIFC Asset Management will manage the CLO, which has a two-year non-call period and a four-year reinvestment period.

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

The deal was supported by 16 institutional investors, CIFC said in a statement on Friday.

Proceeds from the transaction will be used to purchase a portfolio of about $500 million of mostly senior secured leveraged loans.

CIFC Asset Management previously brought the $513.4 million CIFC Funding 2015-II, Ltd./CIFC Funding 2015-II, LLC transaction on April 22.

The firm has priced three CLOs and refinanced a vintage 2011 CLO year to date.

CIFC Asset Management, a New York City-based subsidiary of CIFC Corp., brought four CLO transactions in 2014.

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