CIFC prices; Prudential closes on euro deal; certain sectors highest for potential downgrades

By Cristal Cody

Tupelo, Miss., May 13 - CIFC Asset Management LLC brought a $519.35 million collateralized loan obligation of notes with the triple A rated tranche priced at the same spread as a CLO the company sold earlier in the year, according to market sources on Monday.

CIFC sold the tranche of the CIFC Funding 2013-II, Ltd. deal at Libor plus 115 basis points, the same spread as the tranche of class A-1 floating-rate notes that CIFC Funding 2013-I, Ltd./CIFC Funding 2013-I, LLC priced in a $516.6 million offering in February.

In Europe, Prudential Financial Inc. said that it has closed on the €300 million Dryden XXVII Euro CLO 2013 BV deal, which was the second CLO transaction sold in Europe since the financial crisis.

The European market is expected to see additional CLO deals from issuers that include 3i Group Plc, Ares Management LLC, Intermediate Capital Group plc, Lloyds Banking Group plc, Alcentra Ltd., Carlyle Group LP, KKR Asset Management LLC and GSO Capital Partners LP.

Cairn Capital Ltd. priced the first European CLO since the crisis with a €300.5 million offering in February. Apollo Global Management, LLC also raised €325 million in a CLO sold in April.

In other market activity on Monday, Standard & Poor's said in a report that the high technology and media and entertainment sectors had the highest concentration of potential downgrade CLO constituents with 26% each.

In April, 19 of the top 250 corporate obligations held in rated U.S. cash flow CLOs had downgrade potential, which constitutes 9% of the U.S.-based potential downgrades, S&P said.

Potential downgrades are entities rated AAA to B- that have a negative rating outlook or ratings on CreditWatch with negative implications.

CIFC raises $519.35 million

CIFC Funding 2013-II and CIFC Funding 2013-II, LLC priced $519.35 million of notes due May 15, 2025, which included the following:

• $310 million of class A-1 senior secured floating-rate notes (Aaa//) at Libor plus 115 bps;

• $2.5 million of class X senior secured floating-rate notes (Aaa//) at Libor plus 100 bps;

• $63.5 million of class A-2L senior secured floating-rate notes at Libor plus 465 bps;

• $42 million of class A-3L senior secured deferrable floating-rate notes at Libor plus 265 bps;

• $26.5 million of class B-1L senior secured deferrable floating-rate notes at Libor plus 370 bps;

• $24.5 million of class B-2L senior secured deferrable floating-rate notes at Libor plus 475 bps;

• $6.25 million of class B-3L senior secured deferrable floating-rate notes at Libor plus 575 bps; and

• $44.1 million of subordinated notes.

RBS Securities Inc. was the placement agent.

CIFC Asset Management will manage the cash-flow CLO, which is backed by broadly syndicated first-lien loan senior secured corporate loans.

The notes have a non-call period that ends in May 2015.

Dryden Euro CLO closes

Dryden XXVII Euro CLO 2013's triple A rated tranche of €79.5 million of class A-1B senior secured floating-rate notes (/AAA/AAA) priced at six-month Euribor plus 140 bps, according to a market source.

Dryden XXVII priced seven tranches of notes due June 25, 2025 in the deal.

The transaction allows for about 30% of the assets to pay a fixed-rate coupon, compared to a traditional industry average of about 5%, Prudential said.

The CLO is managed by Prudential Fixed Income's leveraged finance arm in London, Pramerica Fixed Income. Prudential Fixed Income is the principal fixed-income business of Newark, N.J.-based Prudential Financial, Inc.

The euro CLO is the sixth that has been issued under Prudential's Dryden brand in the last 17 months. Prudential manages $9.3 billion in CLO capital.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.