'Rush' of deals likely ahead of FOMC meeting; Neuberger, ACAS, WhiteHorse CLOs in pipeline

By Cristal Cody

Tupelo, Miss., Aug. 26 - CLO primary activity may cool as August comes to a close, but the market could see a "rush to get some deals done" in the first half of September ahead of the Federal Open Market Committee policy meeting, a market source said on Monday.

The Federal Reserve is expected to taper its $85 billion-a-month purchases of mortgage-backed securities and Treasuries in September or October.

"Everything hinges on what happens at the Fed meeting and what happens with the economic data at the end of this week and the end of next week," the market source said.

The Commerce Department will release second-quarter gross domestic product data on Thursday, and the Labor Department will release the widely watched August jobs report on Sept. 6.

A couple of CLOs may price before the month ends, but otherwise activity was quiet on Monday with expectations for a light week, a source said.

"Pretty slow," the source said. "Secondary is relatively quiet as well."

Brigade Capital Management, LLC priced a $416.5 million CLO via BofA Merrill Lynch on Friday, according to market sources. The Battalion CLO IV Ltd./Battalion CLO IV LLC sold seven tranches of notes due Oct. 22, 2025.

Pricing terms were not available by press time.

About $15 billion of CLO deals are in the pipeline, according to a market source.

CLOs in pipeline

Neuberger Berman Fixed Income LLC and American Capital, Ltd. may be in the market later in the week or early September with two CLO offerings, an informed source said on Monday.

Neuberger Berman plans to sell $400 million of notes via underwriter Wells Fargo Securities LLC.

CLO manager American Capital Leveraged Finance Management, LLC is expected to price $415 million of notes in the ACAS 2013-2, Ltd. CLO offering.

Citigroup Global Markets Inc. is the placement agent.

WhiteHorse eyed for September

Looking ahead, H.I.G. Capital, LLC's $410.82 million CLO remains on the calendar with pricing "likely in September," an informed source said on Monday.

The WhiteHorse VII Ltd./WhiteHorse VII LLC transaction includes $238.8 million of class A-1L floating-rate notes (/AAA/); $52.4 million of class A-2L floating-rate notes (/AA/); $31.2 million of class A-3L deferrable floating-rate notes (/A/); $20 million of class B-1L deferrable floating-rate notes (/BBB/); $20.8 million of class B-2L deferrable floating-rate notes; $8.8 million of class B-3L deferrable floating-rate notes (/B/) and $38.82 million of subordinated notes.

RBS Securities Inc. is the placement agent.

H.I.G. WhiteHorse Capital LLC, the credit affiliate of H.I.G. Capital, will manage the CLO, which is backed by broadly syndicated senior secured corporate loans.

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