Eaton Vance, H.I.G. price CLO deals; market on pace for $120 billion of annual issuance

By Cristal Cody

Tupelo, Miss., July 7 – Two collateralized loan obligation managers priced new CLO deals, bringing year-to-date U.S. issuance to about $63 billion, according to market sources on Monday.

Eaton Vance Management priced a $512.34 million CLO offering of notes and placed the AAA tranche at Libor plus 145 basis points, a source said.

H.I.G. Capital, LLC raised $414.25 million in the WhiteHorse IX Ltd./WhiteHorse IX LLC transaction, according to a market source.

The WhiteHorse IX CLO priced the AAA-rated notes at Libor plus 147 bps.

The year is on pace for $120 billion of total issuance, J.P. Morgan Securities LLC analysts said in a market note.

“CLOs stand out as the bright spot in U.S. securitized products,” the analysts said. “We believe our $100 [billion] gross US CLO supply target will be met, but it could be a pyrrhic victory costing softer spreads in mezzanine and possibly AAA unless the investor market deepens.”

About $10 billion of CLO transactions are in the near-term pipeline with a summer slowdown expected in August, according to market sources.

Eaton Vance prices

Eaton Vance Management sold $512.34 million of notes due July 15, 2026 in the CLO deal, according to a market source.

Eaton Vance CLO 2014-1, Ltd./Eaton Vance CLO 2014-1 LLC priced $315.5 million of class A floating-rate notes at Libor plus 145 bps; $63 million of class B floating-rate notes at Libor plus 205 bps; $29.75 million of class C floating-rate notes at Libor plus 300 bps; $27 million of class D floating-rate notes at Libor plus 365 bps and $28.5 million of class E floating-rate notes at Libor plus 503 bps.

The deal included $48.59 million of subordinated notes in the equity tranche.

Wells Fargo Securities LLC was the placement agent.

Eaton Vance Management will manage the CLO.

Collateral consists primarily of first-lien senior secured loans.

Proceeds from the offering will be used to purchase a portfolio of leveraged loans.

Boston-based Eaton Vance Management, a subsidiary of Eaton Vance Corp., priced the $434.225 million Eaton Vance CLO 2013-1, Ltd. transaction in 2013.

H.I.G. sells CLO

H.I.G. Capital priced $414.25 million of notes due July 15, 2026 in the WhiteHorse IX CLO via BofA Merrill Lynch, according to a market source.

The CLO sold $252 million of class A senior secured floating-rate notes (Aaa//AAA) at Libor plus 147 bps; $32.5 million of class B-1 senior secured floating-rate notes (Aa2) at Libor plus 210 bps; $20 million of 4.3% class B-2 senior secured fixed-rate notes (Aa2); $22.75 million of class C deferrable floating-rate notes (A2) at Libor plus 270 bps; $24.25 million of class D deferrable floating-rate notes (Baa3) at Libor plus 360 bps; $19.5 million of class E deferrable floating-rate notes (Ba3) at Libor plus 465 bps; $8.25 million of class F deferrable floating-rate notes (B2) at Libor plus 600 bps and $35 million of subordinated notes.

H.I.G. WhiteHorse Capital, the credit affiliate am of H.I.G. Capital, will manage the CLO.

Collateral consists primarily of broadly syndicated first-lien senior secured loans.

Proceeds from the offering will be used to purchase a $400 million portfolio of mostly leveraged loans.

H.I.G. Capital was in the primary market on April 16 with the $574.75 million WhiteHorse VIII Ltd./WhiteHorse VIII LLC deal.

The Miami-based private equity investment firm priced the $408.9 million WhiteHorse VII Ltd./WhiteHorse VII LLC transaction in 2013.

© 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.