FS KKR prices $507.5 million middle-market CLO; Funding Circle offers £241.6 million notes

By Cristal Cody

Tupelo, Miss., June 25 – FS KKR Capital Corp. closed Tuesday on a debut $507.5 million middle-market CLO transaction.

CLO middle-market volume year to date totals about $7 billion, sources report.

In other primary market action, Funding Circle Ltd. plans to price £241.6 million of British pound sterling notes in the manager’s second securitization transaction of the year.

The deal manager previously priced the £180.26 million Small Business Origination Loan Trust 2019-1 DAC transaction on April 2. The class A tranche of notes priced at British pound sterling Libor plus 105 basis points.

FS KKR Capital wraps CLO

FS KKR Capital closed Tuesday on a new $507.5 million offering of notes due July 15, 2030 in the FS KKR MMC CLO 1 Ltd./FS KKR CLO 1 LLC transaction, according to market sources.

The middle-market CLO sold $299.4 million of class A-1 floating-rate notes at Libor plus 170 bps and $52.3 million of class A-2 floating-rate notes at Libor plus 250 bps at the top of the capital stack.

Citigroup Global Markets Inc. was the placement agent.

The offering is collateralized primarily by middle-market senior secured term loans.

FS KKR Capital is a Philadelphia-based business development company that invests mainly in senior secured and subordinated debt of private middle-market U.S. companies.

Funding Circle on tap

Funding Circle plans to price £241.6 million of British pound sterling notes due March 2028 in the new offering, according to market sources.

The Small Business Origination Loan Trust 2019-2 DAC deal includes £149 million of class A floating-rate asset-backed notes (Aa3/AA); £3.45 million of class B floating-rate asset-backed notes (A3/AA); £19.55 million of class C floating-rate asset-backed notes (Baa3/AA) and £21.85 million of class D floating-rate asset-backed notes (Ba3/A).

The deal also includes £24.15 million of non-rated class E floating-rate asset-backed notes, £11.5 million of non-rated class X floating-rate asset-backed notes and £11.5 million of non-rated class Z variable-rate asset-backed notes.

Deutsche Bank AG, London Branch is the placement agent.

Funding Circle will manage the securities, which are collateralized by small business loans originated through its online lending platform.

Funding Circle is a London-based peer-to-peer lending marketplace for investors and small- and medium-sized businesses.

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