CLO issuance ahead of 2014; Columbia Management, Greywolf, WhiteHorse, Fortress price

By Cristal Cody

Tupelo, Miss., March 23 – Year-to-date U.S. CLO issuance jumped to about $25 billion following a rush of new deals, according to market sources on Monday.

The CLO “primary keeps printing,” J.P. Morgan Securities LLC analysts said in a market note. “The US pace is stronger than 14Q1’s $23.9 billion but less than $29 billion in 13Q1.”

CLO managers including Greywolf Capital Management LP, Columbia Management Investment Advisors LP, H.I.G. WhiteHorse Capital, LLC and Fortress Investment Group LLC tapped the market, sources said.

NewStar wraps deal

In other CLO market activity, NewStar Financial Inc. announced it closed on its previously reported $496.1 million CLO transaction, NewStar Commercial Loan Funding 2015-1 LLC.

NewStar Financial priced five tranches of floating-rate notes due April 20, 2027 in the Rule 144A-eligible private placement offering on March 11.

All notes were priced at par to yield an initial weighted average of about Libor plus 240 basis points, the company said.

The deal was upsized from $400 million.

Wells Fargo Securities, LLC was the placement agent.

NewStar said the CLO offering was structured to satisfy European risk retention rules and included a small Aaa/AAA-rated step-up tranche to meet specific investor demand.

NewStar retained the $85.8 million equity tranche of membership interests.

“We were also pleased by our ability to attract a broad range of investors by retaining skin in the game intended to meet European risk retention requirements through continued capital commitments to our balance sheet securitization program,” John Frishkopf, head of asset management and treasury at NewStar, said in the release.

The notes were backed by a diversified portfolio of commercial loans originated by NewStar.

The CLO has a two-year non-call period and a 4.1-year reinvestment period.

NewStar Financial intends to use the proceeds from the deal to purchase a $500 million portfolio of middle-market loans.

“This CLO represents our 11th to date and our fourth deal in less than 12 months,” NewStar chief executive officer Tim Conway said in the release. “Our track record of issuance in this market demonstrates the value investors place in the NewStar middle market franchise.”

The Boston-based middle-market commercial lender brought three CLO deals in 2014.

Greywolf Capital sells CLO

Greywolf Capital Management priced $658.9 million of notes due April 25, 2027 in the Greywolf CLO V, Ltd./Greywolf CLO V, LLC deal via Citigroup Global Markets Inc., according to a market source.

The AAA tranche of notes priced at Libor plus 160 bps.

Greywolf Capital Management will manage the CLO.

The CLO is non-callable until April 25, 2017. The reinvestment period ends April 25, 2019.

The transaction is backed mainly by a revolving pool of broadly syndicated senior secured corporate loans.

Greywolf Capital Management, a Purchase, N.Y.-based investment management firm, brought two CLO offerings in 2014.

Columbia Management prices

Columbia Management Investment Advisors priced $578 million of notes due April 17, 2026 in the Cent CLO 23 Ltd./Cent CLO 23 Corp. offering, according to an informed source.

The CLO priced the AAA slice at Libor plus 149 bps.

The deal was upsized from $513.5 million.

BofA Merrill Lynch was the placement agent.

Columbia Management Investment Advisors will manage the CLO.

The CLO is non-callable until Oct. 17, 2016. The reinvestment period ends April 17, 2019.

The transaction is backed primarily by a revolving pool of broadly syndicated senior secured corporate loans.

Columbia Management, a Boston-based investment management firm, priced two CLO deals in 2014.

H.I.G. WhiteHorse brings CLO

H.I.G. WhiteHorse Capital priced $512.7 million of notes due 2027 in the WhiteHorse X Ltd./WhiteHorse X LLC CLO offering, according to a market source.

The AAA tranche priced at Libor plus 143 bps.

BofA Merrill Lynch was the placement agent.

The CLO, backed by first-lien senior secured corporate loans and eligible investments, has a two-year non-call period and a four-year reinvestment period.

H.I.G. WhiteHorse Capital will manage the CLO.

The company brought three CLO transactions in 2014.

Dallas-based H.I.G. WhiteHorse Capital is the credit affiliate of private equity firm H.I.G. Capital, LLC.

Fortress raises $350 million

Fortress Investment Group sold $350 million of notes due March 31, 2027 in a middle-market CLO transaction, a source said.

Fortress Credit Opportunities VI CLO Ltd./Fortress Credit Opportunities VI CLO LLC priced the AAA-rated notes at Libor plus 190 bps.

Natixis Securities America LLC arranged the transaction.

FCO VI CLO CM LLC will manage the CLO and enter into a services agreement with Drawbridge Special Opportunities Advisors LLC, a subsidiary of Fortress Investment Group.

The CLO has a non-call period that ends March 31, 2017. The reinvestment period ends March 31, 2019.

The deal is backed primarily by middle-market senior secured corporate loans.

New York City-based Fortress Investment Group priced two CLO deals in 2014.

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