CLO refinancing pace strong; American Money refinances; CF H-BSL refinances three CLOs

By Cristal Cody

Tupelo, Miss., April 3 – Vintage CLO refinancing action continues at a strong pace, with one manager refinancing three CLO deals in the past week.

American Money Management Corp. priced $466 million of notes in a refinancing of a vintage 2015 CLO.

CF H-BSL Management LLC refinanced three Hildene CLO transactions that were brought to the primary market in 2013 and 2014. Hildene Leveraged Credit LLC originally priced the CLOs and sold the management contracts for its four CLOs in 2016.

Just in the first quarter of 2017, $46 billion of CLOs were refinanced or reset, surpassing the total 2016 refinancing volume of $42 billion, according to a BofA Merrill Lynch Global research report released on Monday.

“New issuance conditions remain tough,” BofA Merrill Lynch analysts said in the note. “New-issue pricing levels have tightened alongside loan and secondary U.S. CLO spreads. AAAs reached its tightest print of 122 [basis points] during the quarter. The highlight of the quarter was certainly the volume of refi’s.”

The refinancings have been driven by trends in the loan market, J.P. Morgan Securities LLC analysts said in a note released on Monday.

“The active pipeline is robust and issuance – including refi/reset – is setting historical highs for the U.S. CLO market,” J.P. Morgan Securities LLC analysts said. “New issue spreads have tightened 20-228 bps on the year, but there is risk of spread leakage in the near term given supply and the many choices investors have to buy or reject deals, to borrow language from some of our anecdotal conversations with investors.”

American Money refinances

American Money Management priced $466 million of notes due April 14, 2029 in a refinancing of the AMMC CLO 16, Ltd./AMMC CLO 16 Corp. deal, according to a market source and a notice of proposed first supplemental indenture and amendment to subordinated note issuing and paying agency agreement on Friday.

AMMC CLO 16 sold $317,985,000 of class A-R floating-rate notes at Libor plus 126 bps in the senior slice.

MUFG arranged the offering.

Proceeds will be used to redeem the original class A-1, A-F, A-X, B-1, B-F, C, D and E notes on April 17.

American Money Management was in the primary market in 2016 with two new CLOs and two refinanced transactions.

The Cincinnati-based firm is a subsidiary of insurance holding company American Financial Group, Inc.

Hildene III refinanced

CF H-BSL Management sold $302.5 million of notes due Oct. 20, 2026 at par in a refinancing of a 2014 deal, according to a market source and a notice of proposed supplemental indenture.

Hildene CLO III Ltd./Hildene CLO III LLC priced $220.5 million of class A-R senior secured floating-rate notes at par to yield Libor plus 120 bps in the AAA-rated tranche.

BofA Merrill Lynch was the refinancing agent.

Proceeds of the offering will be used to redeem the original class A, B, C and D notes on April 20.

CF H-BSL is a New York-based affiliate of Fortress Investment Group LLC.

Hildene II CLO refinanced

CF H-BSL Management sold $323.25 million of notes due July 20, 2026 in a refinancing of a 2014 collateralized loan obligation deal, according to a market source.

Hildene CLO II Ltd./Hildene CLO II LLC priced $252 million of senior secured floating-rate notes at par to yield Libor plus 118 bps in the class A-R tranche.

BofA Merrill Lynch was the refinancing agent.

Proceeds of the offering will be used to redeem the original class A, B and C notes.

CF H-BSL is a New York-based affiliate of Fortress Investment Group LLC.

Hildene I refinanced

CF H-BSL Management refinanced $242.5 million of notes due Jan. 17, 2026 in a refinancing of a 2013 CLO deal, according to a market source.

Hildene CLO I Ltd./Hildene CLO I LLC priced $187.5 million of class A-R senior secured floating-rate notes at par to yield Libor plus 115 bps at the top of the capital structure.

BofA Merrill Lynch was the refinancing agent.

Proceeds of the offering will be used to redeem the original class A, B and C notes.

CF H-BSL is a New York-based affiliate of Fortress Investment Group LLC.

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