Och-Ziff sells $510.5 million CLO; volume higher in February; Europe supply sees uptick

By Cristal Cody

Tupelo, Miss., Feb. 23 – In new U.S. CLO issuance, Och-Ziff Loan Management LP priced a $510.5 million deal, a market source said.

The CLO placed the AAA-rated tranche of notes at Libor plus 155 basis points.

The month is projected to end with about $14 billion of total CLO issuance year to date, according to J.P. Morgan Securities LLC.

Several deals are in the pipeline with at least one expected to price over the week.

BlueMountain Capital Management LLC is in the lineup to bring $506.7 million of notes due 2027 in the BlueMountain CLO 2015-1 Ltd./BlueMountain CLO 2015-1 LLC transaction over the week, a source said. Citigroup Global Markets Inc. is the placement agent.

European primary activity also has picked up with four new deals priced in 2015, including Blackstone/GSO Debt Funds Management Europe Ltd.’s €411.1 million Dartry Park CLO Ltd. transaction placed in the previous week.

“Notably, European CLO supply is trending upwards relative to recent years,” JPMorgan analysts said in a market note.

Och-Ziff sells $510.5 million

Och-Ziff Loan Management priced $510.5 million of notes due Jan. 30, 2027 in a CLO deal, according to a market source.

OZLM XI, Ltd./OZLM XI, LLC sold $302 million of class A-1 floating-rate notes at Libor plus 155 bps in the senior tranche. At the bottom of the capital stack, OZLM XI priced $10 million of class E floating-rate notes at Libor plus 615 bps.

The deal was downsized from an initial estimated amount of $512 million.

BofA Merrill Lynch was the placement agent.

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

Proceeds from the deal will be used to purchase collateral to reach a target portfolio of about $500 million of mainly senior secured leveraged loans.

Och-Ziff, an affiliate of New York City-based alternative asset management firm Och-Ziff Capital Management Group LLC, brought four CLO transactions in 2014.

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