Highbridge, Carlyle, On Deck in CLO deal pipeline; year-to-date volume ‘historically low’

By Cristal Cody

Eureka Springs, Ark., April 20 – U.S. CLO pricing action remains light so far in April, but more deals are joining the pipeline, according to market sources on Wednesday.

Both Highbridge Principal Strategies LLC and Carlyle Investment Management LLC plan to return to the U.S. primary market this year with a second CLO offering.

Highbridge Principal Strategies intends to price a $502.05 million deal.

Carlyle Investment Management is marketing a $498.7 million CLO.

Also, On Deck Capital, Inc. announced plans to place a $250 million private deal.

“Two CLOs have been issued so far in April,” Deutsche Bank Securities Inc. CLO analyst Bjarni Torfason said in a note on Wednesday. “While a number of deals are being marketed and we expect issuance to pick up before April ends, the volumes remain historically low.”

The market has seen $9.1 billion of CLO volume year to date, compared to $37.11 billion of issuance in the same period a year ago, he said.

U.S. volume month to date totals $835 million from two CLO deals.

Highbridge offers CLO

Highbridge Principal Strategies plans to price $502.05 million of notes due May 15, 2028 in the CLO deal via Citigroup Global Markets Inc., according to a market source.

The HPS Loan Management 9-2016 Ltd./HPS Loan Management 9-2016 LLC transaction includes $310 million of class A-1 floating-rate notes (/AAA), $65 million of class A-2 floating-rate notes; $30 million of class B deferrable floating-rate notes; $29 million of class C deferrable floating-rate notes; $12 million of class D-1 deferrable floating-rate notes; $14 million of class D-2 deferrable floating-rate notes and $42.05 million of subordinated notes.

The deal is backed by broadly syndicated senior secured loans.

Highbridge has priced one U.S. CLO transaction year to date and closed on three CLO deals in 2015.

The subsidiary of Highbridge Capital Management, LLC is based in New York City.

Carlyle preps new CLO

Carlyle GMS CLO Management LLC plans to price $498.7 million of notes due May 15, 2028 in the Carlyle Global Market Strategies CLO 2016-2, Ltd./Carlyle Global Market Strategies CLO 2016-2 LLC deal, according to a market source.

The offering includes $310 million of class A-1 floating-rate notes (/AAA); $70 million of class A-2 floating-rate notes; $31 million of class B deferrable floating-rate notes; $28 million of class C deferrable floating-rate notes; $8 million of class D-1 deferrable floating-rate notes; $13 million of class D-2 deferrable floating-rate notes and $38.7 million of subordinated notes.

Citigroup Global Markets Inc. is the placement agent.

Carlyle GMS CLO Management, a subsidiary of Carlyle Investment Management, will manage the CLO.

The CLO has a two-year non-call period and a four-year reinvestment period.

The deal is backed primarily by broadly syndicated first-lien senior secured corporate loans.

Carlyle Investment Management has priced one U.S. CLO deal year to date. The firm brought to market five U.S. broadly syndicated CLO deals and one middle-market CLO offering in 2015.

The asset management firm is an affiliate of the Washington, D.C.-based Carlyle Group.

On Deck plans offering

On Deck Capital plans to price a $250 million private offering of series 2016-1 fixed-rate asset-backed notes, according to an 8-K filing with the Securities and Exchange Commission on Wednesday.

OnDeck Asset Securitization Trust II LLC will issue the notes in a Rule 144A and Regulation S eligible deal.

The notes are collateralized by a revolving pool of On Deck Capital’s small business loans.

Proceeds from the deal will be used to purchase a revolving pool of small business loans from On Deck Capital.

On Deck Capital plans to use the purchase price for the sale of the loans to repay any debt secured by those loans, including optionally prepaying in full the $175 million outstanding of series 2014-1 class A and class B notes due 2018, and for general corporate purposes.

The New York-based company provides small business loans.

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