Details eyed on Octagon, Fortress, Jefferies CLOs; KKR prices €516.8 million; volume drops

By Cristal Cody

Tupelo, Miss., Oct. 6 – Details emerged on new CLO issuance from Octagon Credit Investors, LLC, Fortress Investment Group LLC, Jefferies Finance LLC and KKR Credit Advisors (Ireland).

Octagon Credit Investors priced an $820 million CLO and placed the AAA-rated tranche of notes at Libor plus 146 basis points.

Fortress Investment Group brought a $425.4 million upsized deal and printed the AAAs at Libor plus 151 bps.

Jefferies Finance tapped the U.S. market with a $409.5 million CLO transaction. The AAA-rated senior secured floating-rate tranche priced at Libor plus 155 bps.

In the European market, KKR Credit Advisors (Ireland) sold €516.8 million of notes. The AAAs priced at Euribor plus 135 bps.

CLO issuance has remained light over the past few months.

“Trailing 4-week volume has dropped to $1.5 [billion], and unless the trend changes it looks increasingly unlikely that our $100-110 [billion] FY forecast will be met,” J.P. Morgan Securities LLC analysts said in a market note. “CLO 2.0 AAA spreads are now flat on the year and AA and A have given up most of their gains.”

Octagon places $820 million

Octagon Credit Investors priced $820 million of notes due Oct. 20, 2026 in the Octagon Investment Partners 25, Ltd./Octagon Investment Partners 25, LLC transaction, according to a market source.

The CLO sold $496 million of class A senior secured floating-rate notes at Libor plus 146 bps in the senior tranche.

Morgan Stanley & Co. LLC was the placement agent.

Octagon Credit Investors will manage the CLO.

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

Octagon Credit Investors has priced four CLO deals year to date.

The New York-based affiliate of CCMP Capital Advisors, LLC brought four CLO transactions in 2014.

Fortress upsizes

Fortress Investment Group priced a $425.4 million CLO deal, upsized from an initial $409 million offering, according to a market source.

Fortress Credit BSL III Ltd./Fortress Credit BSL III LLC sold $259.5 million of class A senior secured floating-rate notes (Aaa/AAA) at Libor plus 151 bps.

Mitsubishi UFJ Securities (USA) Inc. arranged the transaction.

The CLO manager is FC BSL III CM LLC, which will enter into a services agreement with Drawbridge Special Opportunities Advisors LLC, a subsidiary of Fortress Credit affiliate FIG LLC.

The notes are due Oct. 28, 2026.

The CLO is non-callable until Oct. 18, 2017. The reinvestment period ends Oct. 18, 2019.

The deal is backed primarily by broadly syndicated senior secured corporate loans.

Fortress Investment has priced three CLO transactions and refinanced two vintage 2012 deals year to date.

The New York City-based investment firm brought two CLO offerings in 2014.

Jefferies sells CLO

Jefferies Finance sold $409.5 million of notes due Oct. 17, 2026 in the JFIN CLO 2015-II Ltd./JFIN CLO 2015-II LLC deal, according to a market source.

The CLO priced $2.5 million of class A-X amortizing senior secured floating-rate notes (Aaa/AAA) at Libor plus 145 bps and $245 million of class A-1 senior secured floating-rate notes (Aaa/AAA) at Libor plus 155 bps at the top of the capital stack.

Jefferies LLC was the placement agent.

Apex Credit Partners LLC, a subsidiary of Jefferies Finance, will manage the CLO.

The CLO is non-callable until Oct. 17, 2017, and the reinvestment period ends Oct. 17, 2019.

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

Jefferies Finance has 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.

KKR prices €516.8 million

KKR Credit Advisors (Ireland) placed €516.8 million of notes in the Avoca CLO XV Ltd. deal, according to a market source.

The CLO priced €5 million of 1.77% class A-1 fixed-rate notes and €291.2 million of class A-2 floating-rate notes at Euribor plus 135 bps in the senior tranches.

The deal included €24.6 million of class M1 subordinated notes and €28.5 million of class M2 subordinated notes as equity.

Barclays Bank plc was the placement agent.

KKR Credit Advisors has priced two euro-denominated CLO deals in 2015.

The Dublin-based credit investment management firm placed three euro-denominated CLOs in 2014.

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