Guggenheim brings $846.1 million CLO; CreekSource prices AAAs at Libor plus 145 bps

By Cristal Cody

Tupelo, Miss., Feb. 10 – Guggenheim Partners Investment Management, LLC priced $846.1 million of notes in the market’s largest CLO deal of the year.

The CLO placed the AAA rated tranche at Libor plus 177 basis points.

Also in the primary market, CreekSource LLC brought a $307 million offering. The CLO sold the AAA notes at Libor plus 145 bps.

The deal pipeline has been thin but is expected to fill over the coming months.

“New CLO issuance has been relatively slow thus far in 2015, but we believe the velocity of deals will accelerate,” Barclays analysts said in a note. “We do not see this as a cause for concern and continue to expect 2015 to be a strong year for CLO issuance.”

Barclays said that “secondary pressure on CLO equity has abated, and collateral spreads remain wide enough to support the arb and deal flow.”

Guggenheim raises $846.1 million

Guggenheim Partners Investment Management sold $846.1 million of notes due Feb. 25, 2027 in six tranches in the NZCG Funding Ltd./NZCG Funding LLC deal, according to a market source.

The CLO priced $514 million of class A-1 floating-rate notes at Libor plus 177 bps at the top of the transaction. The CLO sold $51.4 million of class D floating-rate notes at Libor plus 565 bps at the bottom of the capital structure.

Citigroup Global Markets Inc. was the placement agent.

Guggenheim will manage the CLO, which has a four-year reinvestment period that may be extended for up to five years.

The CLO is non-callable for two years.

Proceeds from the deal will be used to purchase collateral to reach a target portfolio of about $845 million of primarily senior secured leveraged loans.

Guggenheim, a New York- and Chicago-based investment management firm, brought two CLO transactions in 2014.

CreekSource prices

CreekSource brought a $307 million six-part CLO transaction via Goldman Sachs & Co., according to a market source.

Clear Creek CLO 2015-1 Ltd. sold $204 million of class A floating-rate notes at Libor plus 145 bps.

The CLO priced $13.5 million of class E floating-rate notes at Libor plus 575 bps at the bottom of the capital stack.

CreekSource, a new entity, will manage the CLO.

40|86 Advisors Inc. is the sub-advisor.

40|86 Advisors has priced two CLO deals over the past two years.

The Carmel, Ind.-based firm is a subsidiary of CNO Financial Group, Inc.

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