Crestline Denali resets $361 million CLO; deals price in compliance with risk retention

By Cristal Cody

Tupelo, Miss., April 26 – In new refinancing activity, Crestline Denali Capital, LP priced $360.61 million of notes in a reset of a vintage 2016 CLO.

Crestline Denali said in a news release the refinancing substantially lowered the fund's borrowing costs and also established new portfolio criteria more in line with current syndicated loan market conditions. The CLO continues to be compliant with U.S. and European risk retention requirements.

“We are pleased, on behalf of the fund's investors, to complete the refinancing of Denali CLO XII,” John Thacker, senior managing director of Crestline Denali Capital, said in a news release. “We appreciate the continued support of our parent, Crestline Investors, in providing incremental capital to the fund so as to maintain compliance with risk retention regulations.”

While risk retention regulations were officially ended in the U.S. market at the start of April, some CLO managers have continued to retain a portion of new issues and refinancing transactions priced this month, sources report.

More than $44 billion of vintage U.S. dollar-denominated CLOs have been refinanced year to date, according to market sources.

Crestline Denali refinances

Crestline Denali Capital refinanced $360.61 million of notes from the Denali Capital CLO XII, Ltd./Denali Capital CLO XII LLC deal, according to a market source and a company press release on Thursday.

Denali Capital CLO XII sold $209 million of class A-1R senior secured floating-rate notes at Libor plus 105 basis points at the top of the capital structure.

BNP Paribas Securities Corp. arranged the deal.

The maturity on the notes was extended to April 15, 2031 from the original April 15, 2028 maturity.

The original $358.84 million Denali Capital CLO XII vehicle was issued March 30, 2016. The CLO had sold $192.25 million of the class A-1 floating-rate notes at Libor plus 155 bps.

Crestline Denali priced one new CLO and refinanced one vintage CLO in 2017.

The asset management firm is based in Oak Brook, Ill.

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