New CLOs price wider; Gallatin, LCM CLOs sell AAA tranches at 115 bps; secondary active

By Cristal Cody

Tupelo, Miss., June 26 - More than $5.5 billion in new collateralized loan obligation deals have priced so far in June, including two deals brought by CLO managers LCM Asset Management LLC and MP Senior Credit Partners LP, market sources said on Wednesday.

LCM Asset Management sold $417.75 million in a Rule 144A CLO offering, with the AAA-rated tranche pricing at Libor plus 115 basis points.

MP Senior Credit Partners brought $300.25 million, including $177 million of class A senior secured floating-rate notes (Aaa//) at Libor plus 115 bps.

Market volatility persuaded some corporate issuers to pull bond deals over the week, but the CLO market appears back on the upswing, according to sources.

"Three deals have already priced [at] much wider levels," one informed source said on Wednesday. "Over the last two days, the market seems to be over the initial scare of the Fed tapering MBS purchases, so secondary volume has picked back up."

LCM XIV prices

LCM XIV LP priced $417.75 million of notes due July 15, 2025 in the CLO brought by LCM Asset Management.

LCM XIV sold $5 million of class X senior floating-rate notes (//AAA) at Libor plus 100 bps; $250 million of class A floating-rate notes (//AAA) at Libor plus 115 bps; $60 million of class B floating-rate notes at Libor plus 165 bps; $26.5 million of class C deferrable floating-rate notes at Libor plus 275 bps; $19 million of class D deferrable floating-rate notes at Libor plus 350 bps; $15.75 million of class E deferrable floating-rate notes at Libor plus 465 bps; $10 million of class F deferrable floating-rate notes at Libor plus 515 bps; and $31.5 million of certificates.

Merrill Lynch, Pierce, Fenner & Smith Inc. arranged the deal.

Proceeds will be used to purchase a portfolio of about $400 million of primarily senior secured leveraged loans.

LCM Asset Management is an asset management firm operated by Guernsey-based Tetragon Financial Group Ltd.

MP raises $300.25 million

MP Senior Credit Partners, a private investment firm formed by UrsaMine Credit Advisors LLC and Matlin Patterson Asset Management LP, this week brought to market the Gallatin CLO V 2013-1, Ltd./Gallatin CLO V 2013-1 LLC, a $300.25 million offering of notes due July 15, 2024, a market source said on Wednesday.

In addition to the class A tranche, the CLO sold $29.5 million of class B-1 senior secured floating-rate notes at Libor plus 165 bps; $8 million of 3.946% class B-2 senior secured fixed-rate notes; $23 million of class C mezzanine secured deferrable floating-rate notes at Libor plus 300 bps; $8.25 million of class D-1 mezzanine secured deferrable floating-rate notes at Libor plus 375 bps; $7 million of class D-2 mezzanine secured deferrable floating-rate notes at Libor plus 425 bps; $12.5 million of class E junior secured deferrable floating-rate notes at Libor plus 475 bps; $5.75 million of class F junior secured deferrable floating-rate notes at Libor plus 575 bps; and $29.5 million of subordinated notes.

GreensLedge Capital Markets LLC and PNC Capital Markets LLC were the placement agents.

MP Senior Credit Partners was last in the market in November with the Gallatin CLO IV 2012 offering, according to market sources.

The private investment firm was formed by UrsaMine Credit Advisors LLC and Matlin Patterson Asset Management LP.

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