THL offers $504.5 million CLO; nearly $50 billion CLOs sold in 2016; secondary volume thin

By Cristal Cody

Eureka Springs, Ark., Sept. 22 – THL Credit Advisors LLC is in the CLO deal pipeline as the primary calendar remains active in September.

THL Credit Advisors is expected to price a $504.5 million U.S. risk retention-compliant CLO, the firm’s second CLO offering year to date.

Also in the deal pipeline, Zais Group, LLC plans to price the $407.9 million Zais CLO 5 Ltd./Zais CLO 5 LLC transaction via J.P. Morgan Securities LLC.

Credit Suisse Asset Management, LLC also is offering $808,975,000 of notes in the U.S. risk retention-compliant Madison Park Funding XXII Ltd. deal. Wells Fargo Securities LLC is the placement agent.

Year to date, nearly $48 billion of CLOs have priced in 115 deals, according to Prospect News data.

Market participants forecast about $50 billion to $60 billion of U.S. CLO supply for the year.

Securitized secondary market activity has been light over the first part of the week.

On Wednesday, $133.47 million traded in 26 high-grade CBO/CDO/CLO issues and $114.69 million traded in 18 non-investment-grade CBO/CDO/CLO securities, according to Trace.

Secondary market volume on Tuesday included seven high-grade issues totaling $29.25 million and seven non-high-grade securities totaling $38.66 million.

Monday’s secondary trading volume totaled $35.81 million from nine high-grade CBO/CDO/CLO issues and $51.3 million from eight non-investment-grade CBO/CDO/CLO securities, according to Trace.

THL offers $504.5 million

THL Credit Advisors plans to price $504.5 million of notes due Oct. 27, 2028 in the CLO transaction, according to a market source.

The THL Credit Wind River 2016-2 CLO Ltd./THL Credit Wind River 2016-2 LLC deal includes $320 million of class A floating-rate notes (//AAA), $57.5 million of class B floating-rate notes, $30 million of class C floating-rate notes, $32.5 million of class D floating-rate notes, $10 million of class E-1 floating-rate notes, $10 million of class E-2 floating-rate notes and $44.5 million of subordinated notes.

Morgan Stanley & Co. LLC is the placement agent.

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

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

The transaction does not permit the purchase of bonds, notes or letters of credit, and the manager is expected to retain 5% of the outstanding amount of each class of notes to comply with the Volcker Rule and U.S. risk retention regulations. The deal is not expected to be compliant with European risk retention regulations.

THL Credit Advisors has priced one CLO deal year to date.

The CLO manager priced two CLO transactions in 2015.

Boston-based THL Credit Advisors is an alternative credit investment firm.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.