CLO deal pipeline grows to nearly $13 billion; KKR prices AAA notes at Libor plus 155 bps

By Cristal Cody

Tupelo, Miss., Jan. 16 - Nearly $13 billion of broadly syndicated collateralized loan obligation deals are in the pipeline, up from about $12 billion at the start of the year, according to informed sources on Thursday.

Several transactions are in marketing for the U.S. and European markets, sources said.

"The market's doing pretty well," one source said.

LCM Asset Management LLC has a U.S. CLO deal in the works, along with Oaktree Capital Management, LP, Redan Park Asset Management LLC and Feingold O'Keefe Capital, LLC, according to informed sources.

In the European market, the Carlyle Group LP plans to bring a €350 million to €400 million CLO deal, while Alcentra Ltd. expects to price the €413.5 million Jubilee CLO 2013-XI BV offering, sources said.

AAA-rated tranches of top tier U.S. deals being marketed are talked to price around Libor plus 150 basis points, in line with deals priced in the Libor plus 150 bps to 155 bps area in December, according to market sources.

KKR Financial Advisors II, LLC's new $384 million CLO priced the AAA tranche at Libor plus 155 bps in late December, a market source said.

KKR prices $384 million

KKR Financial Advisors sold $384 million of notes due Jan. 23, 2026 in the KKR Financial CLO 2013-2, Ltd./KKR Financial CLO 2013-2, LLC deal, according to a market source.

The CLO sold $100 million of class A-1A senior secured floating-rate notes (Aaa) at Libor plus 155 bps; $10 million of 3.3599% class A-1B senior secured fixed-rate notes (Aaa) and $115 million of class A-1C senior secured floating-rate notes (Aaa) at Libor plus 110 bps, which step up to Libor plus 175 bps in July 2015 and to Libor plus 200 bps in July 2016.

In the rest of the structure, KKR priced $38 million of class A-2A senior secured floating-rate notes (Aa2) at Libor plus 180 bps; $10 million of 4.1295% class A-2B senior secured fixed-rate notes (Aa2); $18.5 million of class B senior secured deferrable floating-rate notes (A2) at Libor plus 250 bps; $25.75 million of class C senior secured deferrable floating-rate notes (Baa3) at Libor plus 375 bps; $22 million of class D senior secured deferrable floating-rate notes (Ba3) at Libor plus 500 bps and $44.75 million of subordinated notes.

Greensledge Capital Markets LLC and KKR Capital Markets LLC were the underwriters.

KKR Financial Advisors II will manage the CLO, which is collateralized by broadly syndicated first-lien senior secured loans and eligible investments.

The deal was the second CLO offering that KKR Financial brought in 2013. The specialty finance firm, a subsidiary of KKR Asset Management, LLC, priced the $519.4 million KKR Financial CLO 2013-1, Ltd./KKR Financial CLO 2013-1, LLC transaction in June.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.