Babson prices $411 million; Crescent Capital refinances; BWIC volumes push past $1 billion

By Cristal Cody

Eureka Springs, Ark., Aug. 8 – CLO primary action is slowing in August, while secondary market activity is picking up, according to sources on Monday.

Details emerged for Babson Capital Management LLC’s new $411 million CLO offering.

Also, Crescent Capital Group LP refinanced $256 million of notes in a vintage 2012 CLO.

The three-month Libor yield has been steadily rising over the past month and was at 79 basis points on Monday.

“We note that with 3M Libor’s rise to 79 [bps], some new issue loans are being syndicated without a floor,” J.P. Morgan Securities LLC analysts said in a note. “New issue loans without floors have been rare, but this trend could increase. CLO reinvestment assumptions will change with loan market conditions.”

In the secondary market, BWIC volumes rose to more than $1 billion over the past week for the first time this year, BofA Merrill Lynch analysts said in a note.

The volume was up 59% from the previous week.

BB-rated tranches made up the bulk with about $240 million “in for the bid,” the analysts said.

Spreads were flat across the capital stack with AAAs at Libor plus 150 basis points.

European BWIC volumes were low over the past week, with about €60 million appearing on lists, according to the BofA Merrill Lynch note.

Euro CLO spreads ended the previous week flat across the stack, the analysts said. Euro AAAs were at Euribor plus 140 bps.

Babson Capital prices $411 million

Babson Capital Management raised $411 million of notes due July 15, 2028 in a CLO deal, according to a market source.

Babson CLO 2016-II Ltd./Babson CLO 2016-II LLC sold $252 million of class A senior secured term notes at Libor plus 145 bps in the senior tranche.

Morgan Stanley & Co. LLC was the placement agent.

Proceeds will be used to purchase a portfolio of about $400 million of mostly senior secured leveraged loans.

Babson Capital has priced two U.S. CLOs year to date.

The Springfield, Mass.-based global asset management firm priced two U.S. CLOs and refinanced one vintage CLO in 2015.

Crescent Capital refinances

Crescent Capital Group refinanced $256 million of notes due Aug. 15, 2024 in a vintage 2012 CLO transaction, a market source said.

Atlas Senior Loan Fund, Ltd. sold $191 million of class A-1L-R senior secured floating-rate notes at par with a coupon of Libor plus 122 bps.

The original class A-1L notes priced at Libor plus 132 bps.

Morgan Stanley & Co. LLC was the refinancing agent.

Proceeds will be used to redeem the original class A-1L, A-2L, A-3F, A-3L and B-1L notes.

The remaining original class B-2L and class B-3L notes were not refinanced.

Crescent Capital, a Los Angeles-based alternative asset management firm, was last in the CLO primary market in 2014.

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