May CLO issuance on tap; H.I.G. Capital, Halcyon Loan Advisors place CLO offerings

By Cristal Cody

Tupelo, Miss., April 29 - Some primary activity is expected later in the week in the CLO market, according to an informed source on Tuesday.

Issuance stayed mostly quiet in the post-Easter holiday week, the source said.

In new issuance for April, H.I.G. Capital, LLC brought a $574.75 million collateralized loan obligation transaction and placed the AAA tranche at Libor plus 150 basis points, according to a market source.

Halcyon Loan Advisors LP raised $569.53 million in the Halcyon Loan Advisors Funding 2014-2 Ltd./Halcyon Loan Advisors Funding 2014-2 LLC deal, according to an informed source.

The CLO sold the AAA-rated tranche at Libor plus 160 bps, on the wide range of recent issuance.

More than $32 billion of CLOs have priced year to date.

H.I.G. Capital prices CLO

H.I.G. Capital sold $574.75 million of notes due April 1, 2026 in the WhiteHorse VIII Ltd./WhiteHorse VIII LLC CLO transaction, according to a market source.

The CLO priced $4 million of class X senior secured floating-rate notes at Libor plus 100 bps and $341 million of class A senior secured floating-rate notes at Libor plus 150 bps at the top of the structure.

The CLO also sold $74.25 million of class B floating-rate notes at Libor plus 205 bps; $33 million of class C floating-rate notes at Libor plus 275 bps; $31.5 million of class D floating-rate notes at Libor plus 365 bps; $26.25 million of class E floating-rate notes at Libor plus 455 bps; $12.25 million of class F floating-rate notes at Libor plus 550 bps and $52.5 million of subordinated notes.

Morgan Stanley & Co. LLC was the placement agent.

H.I.G. WhiteHorse Capital, the credit affiliate of equity firm H.I.G. Capital, will manage the CLO, which is backed primarily by broadly syndicated first-lien senior secured corporate loans.

Proceeds from the offering will be used to purchase a $550 million portfolio of primarily leveraged loans.

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

Halcyon offers $569.5 million

Halcyon Loan Advisors sold $569.53 million of notes due April 28, 2025 in the Halcyon Loan Advisors Funding 2014-2 offering, according to an informed source.

The CLO priced $220 million of class A-1A senior secured floating-rate notes (Aaa/AAA/) at Libor plus 160 bps, $110 million of class A-1B senior secured floating-rate notes (Aaa/AAA/) at Libor plus 142 bps and $82.5 million of class A-2 senior secured floating-rate notes (Aa2) at Libor plus 200 bps.

Lower in the capital structure, the CLO priced $38.5 million of class B senior secured deferrable floating-rate notes (A2) at Libor plus 300 bps; $33 million of class C senior secured deferrable floating-rate notes (Baa3) at Libor plus 350 bps; $27.5 million of class D senior secured deferrable floating-rate notes (Ba3) at Libor plus 500 bps and $5.5 million of class E senior secured deferrable floating-rate notes (B2) at Libor plus 575 bps.

The deal included $52.53 million of subordinated notes in the equity tranche.

Citigroup Global Markets Inc. was the placement agent.

Halcyon Loan Advisors 2014-2 LLC, a subsidiary of Halcyon Loan Advisors, will manage the CLO, which is backed primarily by broadly syndicated first-lien senior secured corporate loans.

Halcyon Loan Advisors, a subsidiary of New York City-based Halcyon Loan Management, LLC, priced two CLO deals in 2013.

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