3i, AXA, BlueMountain price; CIFC refinances; BofA Merrill Lynch raises deal forecast

By Cristal Cody

Eureka Springs, Ark., July 25 – CLO primary action continues to heat up in July with details from two new European CLO offerings and one U.S. vintage CLO refinancing transaction, according to market sources on Monday.

In the euro-denominated primary market, 3i Debt Management Investments Ltd. priced a €451.5 million CLO.

AXA Investment Managers, Inc. tapped the market with a €361 million deal.

In the U.S. primary market, BlueMountain Capital Management LLC priced the $505.55 million BlueMountain CLO 2016-2 Ltd./BlueMountain CLO 2016-2 LLC transaction.

Asset Management LLC refinanced a $298 million vintage 2012 AAA-rated CLO tranche.

The deal pace has picked up so much that BofA Merrill Lynch analysts raised their volume forecast to as much as $60 billion for the year from a revised $45 billion of issuance expected.

“After turning overweight last week across the entire US CLO 3.0 stack down to the mezzanine debt tranches, we revisit our issuance target for the year after $29 [billion] worth of BSL and MM deals having priced year-to-date,” BofA Merrill Lynch analysts said in a note released on Monday. “We believe investors and CLO managers alike will continue to see value in the product given the slow growth and low yield environment which we expect to remain in.”

3i Debt prints €451.5 million

3i Debt Management Investments priced €451.5 million of notes due Oct. 15, 2029 in the Harvest CLO XVI DAC offering, according to a market source.

The CLO sold €258 million of class A senior secured floating-rate notes (Aaa/AAA/) at Euribor plus 125 basis points in the senior tranche.

The deal was upsized from €411 million.

Credit Suisse Securities (Europe) Ltd. was the placement agent.

The transaction is backed by broadly syndicated senior secured loans.

3i Debt Management has priced two euro-denominated CLOs year to date.

The affiliate of London-based 3i Group plc placed three European CLOs in 2015.

AXA prices €361 million

AXA Investment Managers priced a €361 million CLO transaction, according to a market source.

Adagio V CLO DAC sold €206.5 million of class A senior secured floating-rate notes at Euribor plus 123 bps at the top of the capital structure.

J.P. Morgan Securities plc arranged the offering.

The notes are due Oct. 15, 2029.

The deal is backed by broadly syndicated senior secured loans and senior secured bonds.

AXA Investment Managers, a subsidiary of Paris-based AXA Group, priced one euro-denominated CLO and one U.S. dollar-denominated CLO in 2015.

BlueMountain sells CLO

BlueMountain Capital Management priced $505.55 million offering of notes due Aug. 20, 2028 in the BlueMountain CLO 2016-2 transaction, according to a market source.

The CLO sold $304.9 million of class A-1 floating-rate notes (Aaa/AAA/) at Libor plus 155 bps in the AAA-rated slice.

Citigroup Global Markets Inc. was the placement agent.

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

BlueMountain Capital Management has priced one CLO year to date.

The New York City-based management firm was in the primary market in 2015 with four U.S. CLO deals.

CIFC refinances

CIFC Asset Management priced a $298 million refinancing of a AAA-rated step-up tranche in a vintage CLO transaction, according to a market source.

CIFC Funding 2012-1, Ltd./CIFC Funding 2012-1, LLC priced $298 million of class A-1-R2 floating-rate notes due Aug. 14, 2024 at par with a coupon of Libor plus 129 basis points.

The original class A-1R notes priced at Libor plus 115 bps and were scheduled to step up to Libor plus 190 bps on the August 2016 payment date.

RBC Capital Markets, LLC was the refinancing agent.

CIFC Asset Management is the CLO manager.

Proceeds will be used to redeem the original class A-1R notes. The remaining tranches in the original $423 million CLO deal were not refinanced.

CIFC Asset Management is a New York-based credit manager.

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