OHA Loan Funding prices; Halcyon to sell $465.5 million CLO; bottom of capital structure firms

By Cristal Cody

Tupelo, Miss., June 27 - Oak Hill Advisors, LP priced a $511.3 million collateralized loan obligation offering of notes due July 15, 2025, bringing the market's new issuance up to three deals for the week and more than $6 billion for the month, according to markets sources on Thursday.

"Since Tuesday, the market has stabilized, stocks have been up and rates haven't moved nearly as much as they were - all of that has led to more CLO issuance," a source said.

Oak Hill Advisors sold $307.5 million of class A-1 senior secured floating-rate notes (Aaa//) at Libor plus 125 basis points in the OHA Loan Funding 2013-1, Ltd. CLO.

Spreads widened in the week since Federal Reserve chairman Ben Bernanke said the central bank's $85 billion monthly asset purchases could be tapered this year.

The new deals are pricing at "wider spreads relative to other deals, but they're still able to print deals," the source said. "To get investor demand at those levels is still a positive thing."

Also in the market over the week, MP Senior Credit Partners LP brought the $300.25 million Gallatin CLO V 2013-1, Ltd./Gallatin CLO V 2013-1 LLC deal, and LCM Asset Management LLC sold the $417.75 million LCM XIV LP offering.

Both Gallatin and LCM priced the AAA-rated tranches at Libor plus 115 bps, sources said.

"CLO spreads widened out quite a bit last week but are since tightening over the past two days," a source said.

In the lower part of the capital structure, bonds are in about 25 bps plus Libor, the source said.

AAA-rated notes and other tranches at the top of the structure are in about 2 bps plus Libor, remaining fairly steady in the secondary market, the source said.

Coming up in new issuance, Halcyon Loan Advisors Funding 2013-2 Ltd./Halcyon Loan Advisors Funding 2013-2 LLC is expected to price $465.5 million of notes on Friday or early in the week ahead, an informed source said.

In other activity in the CLO market, both Carlyle Global Market Strategies CLO 2013-3, Ltd./Carlyle Global Market Strategies CLO 2013-3, LLC and Catamaran CLO 2013-1 Ltd./Catamaran CLO 2013-1 LLC closed on their recent deals, market sources said.

Carlyle Investment Management LLC raised $516.9 million of notes due July 15, 2025 in the deal, which included a $249 million tranche of class A-1A senior secured floating-rate notes (Aaa//) priced at Libor plus 115 bps. As of the closing date, the portfolio is at least 40% ramped.

CLO manager Trimaran Advisors, LLC brought the $465 million Catamaran CLO offering of notes due Jan. 27, 2025 in the first week of June. The $277.8 million tranche of class A floating-rate notes (Aaa//) priced at Libor plus 115 bps.

The underlying collateral pool for the Catamaran CLO is about 75% ramped as of the closing date.

Halcyon to sell $465.5 million

Halcyon Loan Advisors Funding 2013-2 plans to sell $3 million of class X senior secured floating-rate notes due July 8, 2016 (Aaa//); $254 million of class A senior secured floating-rate notes due July 8, 2025 (Aaa//); $46 million of class B-1 senior secured floating-rate notes due July 8, 2025 (Aa2//); $42 million of class B-2 senior secured fixed-rate notes due July 8, 2025 (Aa2//); $27.5 million of class C mezzanine secured deferrable floating-rate notes due July 8, 2025 (A2//); $26.75 million of class D mezzanine secured deferrable floating-rate notes due July 8, 2025 (Baa3//); $22.25 million of class E junior secured deferrable floating-rate notes due July 8, 2025 (Ba3//) and $44 million of subordinated notes due July 8, 2025.

Morgan Stanley & Co., LLC is the placement agent.

Halcyon Loan Advisors 2013-2 LLC, a subsidiary of Halcyon Loan Advisors LP, will manage the CLO.

The managed cash-flow CLO is backed by a $450 million broadly syndicated loan portfolio.

The underlying collateral pool is expected to be about 60% ramped when the deal closes.

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