Bain prices $509 million CLO; Horizon Technology brings deal; secondary spreads flat

By Cristal Cody

Tupelo, Miss., Aug. 5 – In new CLO issuance, Bain Capital Credit CLO Advisors, LP priced $509 million of notes in the manager’s second deal of the year.

In other primary market activity, Horizon Technology Finance Corp. priced a $100 million asset-backed loan securitization transaction.

Overall CLO deal volume has slowed at the start of August following strong issuance in July, market sources report.

Secondary market volume also was light with bids-wanted-in-competition (BWIC) volume of less than $400 million for the week ended Friday, according to a BofA research note released on Monday.

“AAA tranches contributed the highest total volume to this week's auction lists although there was also a meaningful amount of equity items up for bid following July's payment dates,” BofA analysts said in the note.

The impact from the Federal Reserve’s widely expected rate cut on Wednesday and president Donald Trump’s announcement of a 10% tariff on $300 billion of additional Chinese imports “has yet to be fully felt given overall thin volume,” according to the note.

“Generally, the front-end of the curve continued to be well-bid, especially among the more senior tranches,” the analysts said. “Week over week, spread levels remained unchanged.”

AAA-rated CLO spreads were flat at the Libor plus 115 basis points area on Friday.

Bain Capital prices CLO

Bain Capital Credit CLO Advisors priced $509 million of notes due July 2032 in a new CLO offering, according to a market source.

Bain Capital Credit CLO 2019-2 Ltd./Bain Capital Credit CLO 2019-2 LLC sold $320 million of class A senior secured floating-rate notes at Libor plus 131 bps in the AAA-rated tranche.

Goldman Sachs & Co. LLC was the placement agent.

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

Bain Capital has priced two CLOs year to date.

The asset management firm is based in Boston.

Horizon Funding prices

Horizon Technology Finance subsidiary Horizon Funding Trust 2019-1 LLC (Morningstar: A+) priced a $160 million asset-backed loan securitization transaction, according to a news release and a market source on Monday.

The $100 million securitization deal has a maturity of Sept. 15, 2027 and carries a 4.21% coupon.

The company expects to receive proceeds of $98.8 million before fees and expenses following the sale of the $160 million pool of loans, which are across the full credit spectrum.

Horizon Technology Finance said it intends to fund a reserve account in an amount equal to 0.75% of the principal balance as additional credit enhancement for the rated notes.

KeyBanc Capital Markets Inc. was the deal arranger.

The Farmington, Conn.-based specialty finance company provides secured loans to venture capital and private equity backed development-stage companies in the technology, life science, health care information and services and clean-tech industries.

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