Neuberger prices $560.5 million CLO; Regatta prints; AAA spreads firm; loan outflows up

By Cristal Cody

Tupelo, Miss., Dec. 20 – CLO managers are quickly closing new deals ahead of the Christmas Day holiday market closures and end of the year.

Neuberger Berman Loan Advisers LLC priced and closed on $560.5 million of notes in the manager’s fourth CLO offering of 2019.

The deal included split class B tranches with interest-only notes and principal-only notes.

In other new issuance, Regatta Loan Management LLC priced a new $604.9 million CLO in the manager’s second transaction year to date.

Meanwhile on Friday, CIFC Asset Management LLC closed its previously reported $403.2 million CIFC Funding 2019-VI, Ltd. deal that placed $244 million of the class A-1 floating-rate notes at Libor plus 133 basis points.

Credit Suisse Securities (USA) LLC was the placement agent for the offering brought to the market on Dec. 2.

Also on Friday, BlackRock Financial Management, Inc. closed on its previously reported $608,835,000 Magnetite XXIV, Ltd./Magnetite XXIV LLC offering that priced Nov. 19. The CLO sold the $384 million of class A floating-rate notes at Libor plus 133 bps.

Wells Fargo Securities LLC was the placement agent.

Total U.S. broadly syndicated CLO issuance for 2019 “is likely to fall between the record volume of 2018 and the 2017 level of $137 billion and $101 billion, respectively,” Fitch Ratings said in a report on Friday.

As of Wednesday, $102 billion in notes and equity have been issued from 208 broadly syndicated CLOs, Fitch said.

The second half of 2019 was weaker than in the first half, with the fourth quarter “possibly being the weakest quarter of the year,” Fitch said.

Average spreads on senior tranches have improved slightly late in the year.

CLOs priced so far in the fourth quarter have averaged a senior spread of Libor plus 135 bps, compared with Libor plus 137 bps for CLOs priced in the first quarter, according to Fitch.

In the previous year, AAA spreads widened to 120 bps in the fourth quarter of 2018 from 102 bps in the first quarter of 2018, Fitch noted.

Elsewhere, outflows from leveraged loans climbed to $390 million for the past week ended Wednesday from $240 million in the same period a week ago, according to a BofA Global research note released Friday.

Leveraged loan funds saw $82 million in redemptions for the past week, Fitch Ratings said on Friday.

Flows have remained negative for 56 of the past 57 weeks, totaling $42.4 billion of outflows over the period.

Year-to-date net flows stand at approximately $29 billion of outflows, Fitch said.

Neuberger prices CLO 35

Neuberger Berman Loan Advisers priced $560.5 million of notes due Jan. 19, 2033 in a new broadly syndicated CLO transaction, according to market sources.

Neuberger Berman Loan Advisers CLO 35, Ltd./Neuberger Berman Loan Advisers CLO 35, LLC sold $315 million of class A-1 floating-rate notes at Libor plus 134 bps at the top of the capital stack.

SG Americas Securities LLC was the placement agent.

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

Neuberger Berman is a Chicago-based investment management firm and affiliate of Neuberger Berman Group, LLC.

Regatta sells $604.9 million

Regatta Loan Management priced $604.9 million of notes due January 2033 in the CLO offering, according to market sources.

In the senior tranche, Regatta XVI Funding Ltd./Regatta XVI Funding LLC sold $372 million of class A-1 floating-rate notes at Libor plus 136 bps.

BNP Paribas Securities Corp. was the placement agent.

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

Regatta Loan Management is an asset management firm based in New York.

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