Aegon sells $397.15 million CLO; busy deal pace possible in May, likely to follow junk

By Cristal Cody

Eureka Springs, Ark., May 5 – May CLO primary action looks poised to keep pace with the stronger issuance seen in April, according to market sources on Thursday.

Aegon USA Investment Management LLC priced a $397.15 million CLO deal, the firm’s first transaction since 2014.

“It’s just getting started,” a market source said.

New deal volume should stay more robust “if the market is cooperative,” the source said. “It’s hard to tell, but I think it will follow the high-yield market.”

Fitch Ratings said in a news release on Thursday that issuance in the first quarter was thin compared to the previous three years.

Aegon USA Investment Management sold $397.15 million of notes due July 17, 2028 in the new CLO deal, according to a market source.

The Cedar Funding V CLO Ltd./Cedar Funding V CLO LLC vehicle priced $222.42 million of class A-1 floating-rate notes at Libor plus 161 basis points and $31.58 million of 3% class A-2 fixed-rate notes at the top of the capital stack.

Jefferies LLC arranged the offering.

The CLO is non-callable until July 17, 2018. The reinvestment period ends July 17, 2020.

The deal is backed primarily by broadly syndicated senior secured loans.

Cedar Rapids, Iowa-based Aegon USA Investment Management is part of The Hague, Netherlands-based Aegon Group.

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