Triumph Capital Advisors prices first CLO; GC Investment preps second deal of year

By Cristal Cody

Tupelo, Miss., April 2 - Issuance in the collateralized loan obligation market remains strong, while new issue spreads are mostly unchanged across the top of the capital structure, according to informed sources on Wednesday.

Details emerged for Triumph Capital Advisors, LLC's $400 million Trinitas CLO I, Ltd. transaction, the firm's first CLO deal.

Triumph Capital Advisors brought the AAA tranche at Libor plus 153 basis points, on the tight side of the range of recent issuance, according to a market source.

GC Investment Management LLC is expected to be in the primary market over the week with a $410.13 million CLO deal, according to a market source.

The first quarter saw more than $21 billion of deals price, sources said.

"January's issuance was the slowest in 18 months, but February and March followed as the biggest two consecutive issuance months post-crisis, and March ended as the biggest issuance month post-crisis," Deutsche Bank Securities Inc. analyst Bjarni Torfason said in a report on Wednesday. "The continued high demand for CLOs and retail loan funds has allowed significant new loan issuance, even as loan spreads have kept on tightening."

New CLO AAA issuance remains stuck in the Libor plus 155 bps area, 40 bps wider compared to a year ago.

AA spreads are holding mostly unchanged at Libor pus 215 bps, according to the Deutsche report.

New CLO BB notes have priced on average 20 bps wider in the past month at the Libor plus 605 bps area, the note said.

In the secondary market, CLO AAA securities are trading in the Libor plus 140 bps to Libor plus 150 bps area, according to the report.

CLO BB-rated notes are trading in the Libor plus 585 bps to Libor plus 625 bps area.

"Lack of new supply in January drove mezzanine spreads tighter but abundance of new paper since has pushed spreads back wider," Torfason said. "And as banks have been kept out of the market by Volcker uncertainty this quarter, AAA spreads are wider now than they were, at least before December."

Triumph sells $400 million

Triumph Capital Advisors priced $400 million of notes due April 15, 2026 in the CLO deal via Nomura Securities International, Inc., according to a market source.

The Trinitas CLO I, Ltd. offering sold $5 million of class X floating-rate notes (Aaa) at Libor plus 100 bps; $230 million of class A-1 floating-rate notes (Aaa) at Libor plus 153 bps and $10 million of 3.511% class A-2 fixed-rate notes (Aaa) at the top of the capital structure.

The CLO also sold $51.5 million of class B-1 floating-rate notes at Libor plus 190 bps; $10 million of class B-2 floating-rate notes at Libor plus 235 bps; $22.75 million of class C deferrable floating-rate notes at Libor plus 280 bps; $18.75 million of class D deferrable floating-rate notes at Libor plus 360 bps; $16.25 million of class E deferrable floating-rate notes at Libor plus 475 bps and $33.75 million of subordinated notes.

Triumph Capital Advisors will manage the CLO. Prudential Investment Management Inc. is a designated successor manager.

Triumph Capital Advisors, a subsidiary of Triumph Bancorp, Inc., is a Dallas-based investment management firm formed in 2013.

GC Investment to price

GC Investment Management intends to price $410,125,000 of notes due 2026 in the CLO transaction, according to a market source.

Golub Capital Partners CLO 19 (B) Ltd./Golub Capital Partners CLO 19 (B) LLC is expected to offer $131.5 million of class A-1A floating-rate notes (/AAA/); $124 million of class A-1B floating-rate notes (/AAA/); $49 million of class A-2 floating-rate notes; $18.75 million of class B floating-rate notes; $22.8 million of class C floating-rate notes; $22 million of class D floating-rate notes and $4.8 million of class E floating-rate notes.

The deal includes $37,275,000 of subordinated notes in the equity tranche.

Citigroup Global Markets Inc. is the placement agent.

GC Investment Management will manage the CLO.

The portfolio is backed primarily by first-lien senior secured loans.

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

GC Investment Management LLC priced the $453.12 million Golub Capital Partners CLO 18 (M) Ltd./Golub Capital Partners CLO 18 (M) LLC deal on Feb. 27. The affiliate of New York-based middle market lender Golub Capital brought three CLO transactions in 2013.

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