U.S. supply pace climbs; details emerge for Western Asset Management, Kramer Van Kirk CLOs

By Cristal Cody

Tupelo, Miss., March 11 - Details emerged on Tuesday for two new collateralized loan obligation transactions as the pickup in issuance continues to reassure market participants, according to informed sources.

"Although still lagging the record pace set in 2013, the $16.5 [billion] of new U.S. CLO supply in 2014 is the second highest U.S. issuance total through March 7, for any year on record," according to a note released on Tuesday from J.P. Morgan Securities LLC analysts.

Year-to-date global supply stands at more than $18 billion, the analysts said.

New issuance brought in 2014 includes 34 U.S. CLO deals that totaled $16.5 billion and four euro-denominated deals that totaled €1.65 billion, according to market sources.

In the primary market, Western Asset Management Co. priced the $579.27 million Mountain Hawk III CLO, Ltd./Mountain Hawk III CLO LLC offering and placed $346.25 million of class A senior secured floating-rate notes at Libor plus 150 basis points, 5 bps tighter than price talk, according to an informed source.

The firm reduced the number of tranches in the final upsized deal, according to the market source. The original offering called for an additional tranche of $14.75 million of class F secured deferrable floating-rate notes (B2).

Kramer Van Kirk Credit Strategies LP was in the market with a $584.27 million CLO transaction and priced the AAA tranche on the wide end of the range at Libor plus 159 bps, according to an informed source.

Kramer Van Kirk also eliminated its class F tranche in the deal, according to the source. The transaction originally was sized at $413.2 million and included a $4.8 million tranche of class F deferrable floating-rate notes (/B/).

Western Asset prices

Western Asset Management brought an upsized $579.27 million of notes due April 21, 2025 in the new CLO offering, according to an informed source.

The Mountain Hawk III CLO priced $346.25 million of class A senior secured floating-rate notes (Aaa/AAA/) at Libor plus 150 bps; $69.25 million of class B senior secured floating-rate notes (Aa2) at Libor plus 210 bps; $45.75 million of class C secured deferrable floating-rate notes (A2) at Libor plus 280 bps; $30.75 million of class D secured deferrable floating-rate notes (Baa3) at Libor plus 350 bps; $24.5 million of class E secured deferrable floating-rate notes (Ba2) at Libor plus 485 bps and $62.77 million of subordinated notes.

The deal was upsized from $400 million.

Deutsche Bank Securities Inc. was the placement agent.

Western Asset Management will manage the CLO, which is backed primarily by a revolving pool of broadly syndicated first-lien senior secured loans.

Western Asset Management, a Pasadena, Calif.-based fixed income manager, was in the primary market twice in 2013 with the $501.25 million Mountain Hawk I CLO Ltd./Mountain Hawk I CLO LLC offering and the $518.05 million Mountain Hawk II CLO Ltd./Mountain Hawk II CLO LLC deal.

Kramer Van Kirk prices CLO

Kramer Van Kirk Credit Strategies priced an upsized $584.27 million of notes due April 15, 2026 in the CLO transaction via Goldman Sachs & Co., according to an informed source.

KVK CLO 2014-1 Ltd./KVK CLO 2014-1 LLC priced $352 million of class A floating-rate notes (/AAA/) at Libor plus 159 bps; $68.37 million of class B floating-rate notes (/AA/) at Libor plus 225 bps; $48.59 million of class C deferrable floating-rate notes (/A/) at Libor plus 290 bps; $31.08 million of class D deferrable floating-rate notes (/BBB/) at Libor plus 375 bps; $25.99 million of class E deferrable floating-rate notes (/BB/) at Libor plus 475 bps and $58.24 million of subordinated notes.

Kramer Van Kirk Credit Strategies will manage the CLO, which is backed primarily by a revolving pool of broadly syndicated senior secured corporate loans.

Chicago-based Kramer Van Kirk Credit Strategies was in the primary market in 2013 with the $570.01 million KVK CLO 2013-1 Ltd./KVK CLO 2013-1 LLC transaction and the $415 million KVK CLO 2013-2 Ltd./KVK CLO 2013-2 LLC offering.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.