AGL, Barings price CLOs; Moody’s expands downgrade reviews; CBO/CDO/CLO paper softens

By Cristal Cody

Tupelo, Miss., June 3 – AGL Credit Management LP priced $600 million of notes in the manager’s third broadly syndicated CLO offering of the year.

Meanwhile, Barings LLC priced a $335.53 million transaction in the company’s first CLO deal of 2020.

Barings was in the primary market in 2019 with four U.S. CLO transactions.

More than $25 billion of dollar-denominated CLOs have priced year to date, according to market sources.

In other activity, Moody’s Investors Service announced on Wednesday that it placed another 241 securities issued by 115 U.S. broadly syndicated loan-backed CLOs on review for possible downgrade, as well as 234 additional euro CLO tranches issued by 77 EMEA CLOs.

The announcement follow’s Moody’s action on April 17 to place 859 U.S. CLO securities and 117 Europe, Middle East and Africa issues on review.

The latest action brings the total number of U.S. CLO securities on review for possible downgrade to 1,100, or about 24% of Moody’s-rated broadly syndicated CLO/CBO securities outstanding, Moody’s said.

The number of EMEA CLO tranches on review now totals 351, or about 16% of Moody’s EMEA broadly syndicated CLO securities outstanding.

The actions on Wednesday were “primarily prompted by a continuing decline in the credit quality of CLO portfolios as a result of economic shocks stemming from the coronavirus pandemic,” Moody’s said. “Since April, the decline in corporate credit has resulted in a significant number of downgrades among the assets underlying some CLOs.”

Elsewhere, secondary market volume ramped up to $630.78 million in high-grade CBO/CDO/CLO paper on Tuesday from $461.46 million at the start of the week, according to Trace data.

Average prices for non-high-grade paper softened to 94.20 from 96.80 on Monday.

Trading volume rose to $139.36 million in lower-rated securitized issues from $71.76 million of volume on Monday.

Lower-rated paper declined to 72.40 from a 75.70 average in Monday’s session, Trace data shows.

AGL prices $600 million

AGL Credit Management priced $600 million of notes due July 20, 2030 in the new CLO offering, according to market sources.

AGL CLO 5 Ltd./AGL CLO 5 LLC sold $355.8 million of class A-1 floating-rate notes at Libor plus 205 basis points at the top of the capital stack.

Mizuho Securities USA LLC was the placement agent.

AGL CLO Credit Management LLC will manage the CLO.

The offering is collateralized primarily by broadly syndicated first-lien senior secured corporate loans.

The New York-based investment firm was founded in 2019 and is a subsidiary of the Abu Dhabi Investment Authority.

Broad River CLO prints

Barings priced $335.53 million of notes due April 20, 2029 in its new deal, according to market sources.

Broad River BSL Funding CLO Ltd. 2020-I/Broad River BSL Funding CLO Ltd. 2020-I LLC sold $212.5 million of class A floating-rate notes at Libor plus 185 bps in the AAA-rated tranche.

Citigroup Global Markets Inc. was the placement agent.

The CLO will be managed by Jocassee Partners LLC, a joint venture formed in 2019 between South Carolina Retirement Systems Group Trust and Barings BDC Inc.

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

The Charlotte, N.C.-based CLO manager is a subsidiary of Massachusetts Mutual Life Insurance Co.

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