CIFC, Black Diamond Capital sell CLOs; Invesco, Madison Capital bring reprint action

By Cristal Cody

Tupelo, Miss., June 24 – CIFC Asset Management LLC priced $510.6 million of notes in the manager’s fourth new broadly syndicated CLO deal of the year.

Black Diamond Capital Management, LLC returned to the primary market a second time year to date to price a new $507.5 million CLO.

More than $59 billion of broadly syndicated and middle-market CLOs have priced year to date, about 3% behind the total in the same period a year ago, BofA Securities analysts said in a note released on Monday.

In the refinancing space, Invesco RR Fund LP, a majority owned affiliate of Invesco Senior Secured Management, Inc., repriced $523.5 million of notes from a 2016 broadly syndicated CLO.

Madison Capital Funding LLC also plans to price $302.85 million of notes in a refinancing of a vintage 2017 middle-market CLO.

The CLO manager has priced one new CLO offering year to date.

The primary market saw $3.2 billion of deals price in seven transactions in the past week with “moderate compression of manager tiering” after some deals priced the AAA tranche wider than others, the BofA analysts said.

New issue AAA spreads were on average pricing about 1 basis point wider on the week at the Libor plus 129 bps area.

New issue spreads are expected to tighten initially in the third quarter, Wells Fargo Securities, LLC analysts said in a new research note.

“Our outlook for Q3 is for AAA spreads to tighten early in the quarter, but for the entire quarter, we see more downside than upside for spreads,” the Wells Fargo analysts said. “With the market’s eyes – and ears – trained on further guidance from the Fed, we believe that CLO AAA spreads may tighten up to 5 bps through the end of July, but could then drift wider to end the quarter 7-8 bps wide of current levels.”

Supply is expected to stay healthy with a “large overhang of potential refi/reset candidates” and a deal pipeline with 145 warehouses currently open, limiting an AAA rally, according to the Wells Fargo report.

CLO AAA spreads are forecast to end the third quarter in the low to mid-130 bps over Libor range.

CIFC prices $510.6 million

CIFC Asset Management priced $510.6 million of notes due July 15, 2032 in the CIFC Funding 2019-IV, Ltd. broadly syndicated CLO offering, according to market sources.

The CLO sold $322.5 million of class A-1 floating-rate notes at Libor plus 130 bps and $57.5 million of class A-2 floating-rate notes at Libor plus 180 bps at the top of the capital structure.

BNP Paribas Securities Corp. was the placement agent.

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

CIFC Asset Management is an investment adviser based in New York.

Black Diamond sells CLO

Black Diamond Capital Management priced $507.5 million of notes due July 23, 2032 in the Black Diamond CLO 2019-2, Ltd./Black Diamond CLO 2019-2, LLC CLO transaction, according to market sources.

The CLO sold $310 million of the class A-1a senior secured floating-rate notes at Libor plus 143 bps, $15 of class A-1b senior secured floating-rate notes at Libor plus 175 bps and $51.25 million of class A-2 senior secured floating-rate notes at Libor plus 215 bps.

Mizuho Securities USA LLC was the placement agent.

Black Diamond CLO 2019-2 Adviser, LLC will manage the CLO.

The notes are backed mainly by broadly syndicated senior secured corporate loans.

Black Diamond is an alternative asset management firm with locations in Greenwich, Conn., London and St. Thomas.

Invesco refinances

Invesco RR Fund sold $523.5 million of notes due Oct. 18, 2028 in a refinancing of the Riserva CLO Ltd. deal, according to a market source.

Riserva CLO priced $384 million of class A-R floating-rate notes at Libor plus 114 bps in the AAA-rated tranche.

Credit Suisse Securities (USA) LLC was the refinancing placement agent.

In the original $614 million transaction issued Dec. 21, 2016, the CLO sold $384 million of the class A floating-rate notes at Libor plus 146 bps.

Proceeds were used to redeem the original notes.

The CLO is collateralized primarily by broadly syndicated first-lien senior secured corporate loans.

Invesco is a subsidiary of Atlanta-based Invesco, Ltd.

Madison Capital refinancing

Madison Capital Funding plans to price $302.85 million of notes due April 20, 2029 in a refinancing of a vintage 2017 middle-market CLO deal, according to a notice of proposed supplemental indenture on Friday.

The MCF CLO V LLC deal includes $173.5 million of class A-R floating-rate notes (expected ratings AAA/AAA), $25 million of class B-R floating-rate notes (expected ratings AA), $23.5 million of class C-R floating-rate notes (expected ratings A) and $18 million of class D-R floating-rate notes (expected ratings BBB-).

Natixis Securities Americas LLC is the refinancing placement agent for the Rule 144A and Regulation S deal.

In the original $302.85 million transaction issued March 9, 2017, the CLO priced $173.5 million of class A floating-rate notes at Libor plus 190 bps; $25 million of class B floating-rate notes at Libor plus 255 bps; $23.5 million of class C floating-rate notes at Libor plus 355 bps; $18 million of class D floating-rate notes at Libor plus 455 bps; $22.25 million of class E floating-rate notes at Libor plus 735 bps and $40.6 million of subordinated notes.

Proceeds will be used to redeem the original notes on July 22.

The CLO is backed primarily by senior secured loans.

Madison Capital Funding is a Chicago-based middle-market finance company and subsidiary of New York Life Insurance Co.

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