CLO market quiet; new details emerge for Credit Value Partners, Cerberus CLO deals

By Cristal Cody

Tupelo, Miss., Jan. 3 - The collateralized loan obligation market saw little activity on Friday with more than a few participants still out for the holiday week, according to informed sources.

"It's dead quiet," one source said.

Primary activity is expected to pick back up in the week ahead, with more than $13 billion of broadly syndicated and middle market deals in the pipeline, market sources said.

Some CLO managers expected to tap the market soon include Redan Park Asset Management LLC, which intends to price a U.S. CLO deal, and Alcentra Ltd., which has a European CLO offering in the works, sources said.

In new CLO issuance, details emerged for Credit Value Partners LP's $419.35 million CLO deal and Cerberus Leveraged Loan Opportunities Fund II, LP's $458.15 million middle market CLO transaction.

Credit Value Partners prices

Credit Value Partners sold $419.35 million of notes due Jan. 16, 2026 via Credit Suisse Securities (USA) LLC, according to a market source.

CVP Cascade CLO-1, Ltd./CVP Cascade CLO-1 LLC priced $255.25 million of class A-1 floating-rate notes (Aaa/AAA/) at Libor plus 145 basis points at the top of the capital structure.

The CLO also sold $40.5 million of class A-2 floating-rate notes (/AA/) at Libor plus 185 bps; $34.5 million of class B deferrable floating-rate notes (/A/) at Libor plus 270 bps; $21 million of class C deferrable floating-rate notes (/BBB/) at Libor plus 350 bps; $18.25 million of class D deferrable floating-rate notes (/BB/) at Libor plus 460 bps; $11.25 million of class E deferrable floating-rate notes (/B/) at Libor plus 550 bps and $38.6 million of subordinated notes.

Collateral on the deal consists of a revolving pool of broadly syndicated senior secured corporate loans.

Credit Value Partners, a Greenwich, Conn.-based investment firm with more than $750 million in regulatory assets under management, will manage the CLO.

Cerberus prices CLO

In the middle market space, Cerberus Leveraged Loan Opportunities Fund II sold $458.15 million of notes due 2023 via Wells Fargo Securities LLC, according to a market source.

The Cerberus Onshore II CLO LLC vehicle priced $182 million of class A-1 senior secured floating-rate notes (Aaa) at Libor plus 200 bps and $25 million of class A-2 senior secured floating-rate notes (Aaa) at Libor plus 150 bps, which step up to Libor plus 250 bps after the reinvestment period ends in May 2015.

The CLO also priced $27 million of class B senior secured floating-rate notes (Aa2), $35,438,000 of class C secured deferrable floating-rate notes (A2), $23,625,000 of class D secured deferrable floating-rate notes (Baa2), $22.5 million of class E secured deferrable floating-rate notes and $142,589,000 of subordinated notes.

Additional pricing terms were not immediately available.

The CLO is backed primarily by a portfolio of small and middle market first-lien senior secured loans and eligible investments.

Cerberus Leveraged Loan Opportunities Fund II, an affiliate of middle market lender Cerberus Capital Management, LP, will manage the CLO.

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