CLO primary market slows; choppy summer forecast; Apex markets $352.5 million JFIN CLO

By Cristal Cody

Eureka Springs, Ark., June 30 – The CLO primary market is most likely “on pause” in the short term due to Brexit but will improve longer term, Wells Fargo Securities LLC analysts said in a note on Thursday.

“We expect a choppy summer, and to see more downside than upside entering H2,” the analysts said.

The secondary market is “likely to be slow in the near-term on Brexit uncertainty,” according to the note.

Some issuers are expected to price new deals, including Apex Credit Partners LLC.

Apex Credit Partners is marketing a $352.5 million CLO offering of notes due August 2028, according to a source.

The JFIN CLO 2016-1 Ltd./JFIN CLO 2016-1 LLC deal includes $165.5 million of class A-1 floating-rate notes (//AAA); $16.5 million of class A-2a floating-rate notes (//AAA); $10 million of class A-2b floating-rate notes (//AAA); $30 million of class A-F floating-rate notes (//AAA); $30.5 million of class B-1 floating-rate notes; $20 million of class B-F fixed-rate notes; $20 million of class C floating-rate notes; $20 million of class D floating-rate notes and $19.5 million of class E floating-rate notes.

The transaction includes $10.5 million of senior subordinated notes and $20 million of junior subordinated notes as equity.

Jefferies LLC is the placement agent.

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

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

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