Apollo Credit Management, Redan Park Asset Management eye CLO deals; pipeline full

By Cristal Cody

Tupelo, Miss., Dec. 13 - A few deals are expected to price before the year ends, with one CLO manager likely to bring a collateralized loan obligation offering in the week ahead, according to an informed source.

Apollo Credit Management LLC is expected to price a broadly syndicated CLO before the market breaks for the Christmas Day holiday, a source said.

Redan Park Asset Management LLC also is in the pipeline with a CLO deal, according to an informed source.

More than $14 billion of CLO transactions are in the works, with many deals expected to price in early 2014, sources said.

Nearly $78 billion of CLO deals have priced year to date, market sources said.

Rule questions

CLO market participants continued on Friday to grapple with how the Volcker Rule, issued on Tuesday, will impact the space.

The rules, part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, prohibit banks from short-term proprietary trading and impose limits on banks' investments in hedge funds or private equity funds.

The rules are effective April 1, 2014. The Federal Reserve has delayed compliance by banking organizations until July 21, 2015.

Loan-only CLOs are exempt from the definition of "covered funds" but those that hold high-yield bonds or other securities will be subject to the Volcker Rule.

"Similarly, warehouses should still work so long as they are loan-only," Barclays analysts said in a note on Friday.

"While some questions remain open, the new provisions under Volcker do not appear disastrous, even for non-exempt CLOs currently outstanding," the note said. "New vehicles will likely seek to make necessary changes to ensure that senior tranches fail the ownership interest definition or, alternatively, may choose to eliminate high-yield buckets altogether."

Apollo eyes deal

Apollo Credit Management is set to price the CLO via Citigroup Global Markets Inc., a source said.

Apollo Credit Management brought the $608.86 million ALM VIII, Ltd./ALM VIII, LLC deal in November via bookrunner Wells Fargo Securities, LLC. In August, Apollo priced the $857.06 million ALM VII(R), Ltd./ALM VII(R), LLC and $932.22 million ALM VII(R)-2, Ltd./ALM VII(R)-2, LLC transactions via J.P. Morgan Securities LLC.

Apollo Credit Management is a subsidiary of New York City-based Apollo Global Management, LLC.

Redan Park plans CLO

Redan Park Asset Management is underway with plans to price a CLO offering, according to an informed source.

C&Co/PrinceRidge LLC will arrange the CLO deal.

Redan Park Asset Management, an asset management firm formed in 2012 to invest in high-yield loans, is owned by New York hedge fund Mead Park Holdings LP and Puerto Rico-based Doral Financial Corp.

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