April CLO issuance strong; details emerge on Prudential, Marathon, Aegon, BMO CLO deals

By Cristal Cody

Tupelo, Miss., April 30 - CLO issuance in the U.S. and European markets in April totaled more than $11 billion, according to market sources.

New transactions brought over the month included CLOs from Prudential Investment Management, Inc., Marathon Asset Management LP, Aegon USA Investment Management LLC and BMO Asset Management Corp.

The CLO deal pipeline sits at about $17 billion, according to market sources.

"Several" deals remain in the works, one source said.

Prudential prices CLO

Prudential Investment Management sold $811.75 million of notes in the Dryden 33 Senior Loan Fund/Dryden 33 Senior Loan Fund LLC offering via Goldman Sachs & Co., according to an informed source.

The CLO priced $504 million of class A floating-rate notes at Libor plus 148 basis points; $90.4 million of class B floating-rate notes at Libor plus 200 bps; $64 million of class C floating-rate notes at Libor plus 285 bps; $40.8 million of class D floating-rate notes at Libor plus 365 bps; $35.2 million of class E floating-rate notes at Libor plus 450 bps and $77.35 million of subordinated notes.

Prudential Fixed Income will manage the CLO, which is backed by a revolving pool of broadly syndicated senior secured loans.

The company was in the market in 2013 with five CLO deals under the Dryden brand, including three U.S. transactions and two euro-denominated offerings.

Prudential Investment Management is the primary asset management business of Newark, N.J.-based Prudential Financial, Inc.

Marathon sells $490.3 million

Marathon Asset Management sold $490.25 million of notes due May 2025 in the Marathon CLO VI Ltd./Marathon CLO VI LLC deal, according to an informed source.

The CLO priced $288.5 million of class A-1 senior secured floating-rate notes (Aaa/AAA/) at Libor plus 153 bps; $51.7 million of class A-2 senior secured floating-rate notes (/AA/) at Libor plus 205 bps; $45.8 million of class B senior secured deferrable floating-rate notes (/A/) at Libor plus 285 bps; $25.75 million of class C senior secured deferrable floating-rate notes (/BBB/) at Libor plus 350 bps; $22.7 million of class D secured deferrable floating-rate notes (/BB/) at Libor plus 505 bps; $7.3 million of class E secured deferrable floating-rate notes (/B/) at Libor plus 580 bps and $48.5 million of subordinated notes.

J.P. Morgan Securities LLC arranged the deal.

Marathon Asset Management will manage the CLO, which is backed primarily by broadly syndicated first-lien senior secured loans to corporate borrowers.

Marathon Asset Management, a New York City-based global credit manager, was last in the primary market in 2013 when it priced the $614.25 million Marathon CLO V Ltd. deal.

Aegon prices $389.25 million

CLO manager Aegon USA Investment Management priced $389.25 million of notes due 2026 via Jefferies LLC in the offering, according to an informed source.

Cedar Funding III CLO Ltd./Cedar Funding III CLO LLC sold $184 million of class A-1 floating-rate notes (Aaa Expected/AAA/) at Libor plus 153 bps and $50 million of 3.35% class AF fixed-rate notes (Aaa Expected/AAA/).

The CLO also sold $38.5 million of class B-1 floating-rate notes (/AA/) at Libor plus 225 bps; $14 million of 4.46% class BF fixed-rate notes (/AA/); $24 million of class C deferrable floating-rate notes (/A/) at Libor plus 280 bps; $19.5 million of class D deferrable floating-rate notes (/BBB/) at Libor plus 355 bps; $17.5 million of class E deferrable floating-rate notes (/BB/) at Libor plus 490 bps and $41.75 million of subordinated notes.

Collateral consists of broadly syndicated senior secured loans to corporate borrowers.

Aegon USA Investment Management, part of the Hague, the Netherlands-based Aegon Group, priced the $365.2 million Cedar Funding II CLO Ltd./Cedar Funding II CLO LLC transaction in March 2013.

BMO Asset brings CLO

BMO Asset Management priced $359.2 million of notes due 2025 in the Great Lakes CLO 2014-1 Ltd./Great Lakes CLO 2014-1 LLC deal, according to an informed source.

Great Lakes CLO 2014-1 sold $197.5 million of class A senior floating-rate notes (Aaa/AAA/) at Libor plus 185 bps; $35 million of class B floating-rate notes (Aa2) at Libor plus 260 bps; $29 million of class C deferrable floating-rate notes (A2) at Libor plus 370 bps; $15.75 million of class D deferrable floating-rate notes (Baa2) at Libor plus 420 bps; $31 million of class E deferrable floating-rate notes (Ba2) at Libor plus 525 bps; $12.75 million of class F deferrable floating-rate notes (B2) at Libor plus 600 bps and $38.2 million of subordinated notes.

Deutsche Bank Securities Inc. and BMO Capital markets GKST Inc. were the placement agents.

BMO Asset Management will manage the CLO, which is collateralized by a revolving pool of senior secured loans to middle-market corporate borrowers.

BMO Asset Management, part of BMO Financial Group, was last in the primary market in 2012 when it brought the $361.17 million Great Lakes CLO 2012-1 Ltd. transaction.

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