NewStar prices broadly syndicated CLO; middle-market supply year to date about $3 billion

By Cristal Cody

Eureka Springs, Ark., Aug. 23 – NewStar Capital, LLC priced a $409.75 million broadly syndicated CLO, the firm’s first in the space, according to a market source on Tuesday.

Parent company NewStar Financial, Inc. priced a middle-market CLO deal in February and sold three middle-market CLOs in 2015.

Year to date, nearly $40 billion of U.S. broadly syndicated CLOs have priced, according to Prospect News data.

In the middle-market sector, about $3 billion of middle-market CLOs have priced year to date, according to a BofA Merrill Lynch note. In 2015, middle-market CLO managers priced $6.4 billion of deals.

NewStar places CLO

NewStar Capital sold $409.75 million of notes due Oct. 20, 2028 in the transaction, according to a market source.

In the senior tranche, Arch Street CLO Ltd./Arch Street CLO LLC priced $256 million of class A floating-rate notes at Libor plus 165 basis points.

Credit Suisse Securities (USA) LLC arranged the deal.

The transaction is backed entirely by first-lien senior secured loans.

Proceeds from the deal will be used to purchase a $400 million portfolio of mostly senior secured leveraged loans.

NewStar Capital is a subsidiary of Boston-based NewStar Financial, Inc.

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