Black Diamond Capital Management, AXA Investment Managers price CLOs in pre-holiday rush

By Cristal Cody

Tupelo, Miss., Dec. 23 - Several CLO managers brought deals ahead of the Christmas holiday, according to market sources on Monday.

Black Diamond Capital Management, LLC sold the $412.9 million Black Diamond CLO 2013-1, Ltd./Black Diamond CLO 2013-1, LLC transaction.

In addition, AXA Investment Managers Inc. priced the $369.35 million Allegro CLO I Ltd./Allegro CLO I LLC, its first U.S.-based CLO deal, according to market sources.

As previously reported, Apollo Credit Management (CLO) LLC brought the $710.8 million ALM X Ltd./ALM X LLC deal, Deutsche Asset & Wealth Management sold the $441.81 million Flagship VII Ltd./Flagship VII LLC transaction and MCF Capital Management LLC priced the $305.9 million MCF CLO III LLC offering.

Market sources do not anticipate much action for the remainder of the year but expect an active deal calendar in January.

"Everyone's headed home," one source said.

In other action on Monday, the TCW Group, Inc. reported that it closed on the $400 million Figueroa CLO 2013-2, Ltd./Figueroa CLO 2013-2, LLC deal.

The CLO priced $245 million of class A-1 senior secured floating-rate notes (Aaa/AAA/) at Libor plus 145 basis points, according to a market source.

In February when AAA spreads were tighter, TCW sold $249 million of class A-1 notes (Aaa/AAA/) at Libor plus 125 bps in the Figueroa CLO 2013-1, Ltd./Figueroa CLO 2013-1, LLC transaction.

TCW Group said in a news release that the Figueroa CLO 2013-2 vehicle is managed jointly by Jerry Cudzil, TCW's head of U.S. credit trading, and Jamie Farnham, TCW's director of credit research.

Farnham said the firm has "seen solid performance from our loan products thus far."

Los Angeles-based TCW manages about $85 billion in fixed income assets, which includes more than $6.5 billion in leveraged finance.

TCW said it has expanded its dedicated loan products and assets significantly during 2013. In addition to the two CLO funds, TCW in June launched the MetWest Floating Rate Income Fund, which invests in loans and other credit products.

"As investors continue to seek yield, as well as protection from rising rates, they are increasingly turning to floating-rate loan products," Cudzil said in the statement. "We've seen strong investor demand for both CLOs and the MetWest Floating Rate Income Fund from both institutional and retail clients."

Black Diamond taps market

Black Diamond Capital Management sold $412.9 million of notes due Feb. 6, 2026 in the CLO deal via Natixis Securities Americas LLC, according to a market source.

The Black Diamond CLO 2013-1 priced $2.1 million of class X secured floating-rate notes (Aaa) at Libor plus 100 bps; $246.9 million of class A-1 senior secured floating-rate notes (Aaa) at Libor plus 145 bps; $53.7 million of class A-2 senior secured floating-rate notes at Libor plus 195 bps; $29.3 million of class B senior secured deferrable floating-rate notes at Libor plus 285 bps; $21.7 million of class C senior secured deferrable floating-rate notes at Libor plus 360 bps; $17.1 million of class D secured deferrable floating-rate notes at Libor plus 510 bps and $42.1 million of subordinated notes.

The non-call period on the CLO ends in February 2016, and the reinvestment period ends in February 2018.

The CLO is collateralized by broadly syndicated first-lien senior secured loans to corporate borrowers.

Black Diamond CLO 2013-1 Adviser, LLC, an affiliate of Black Diamond Capital Management, will manage the CLO.

Black Diamond Capital Management is an alternative asset management firm with offices in Greenwich, Conn., Lake Forest, Ill., and London.

AXA prices $369.35 million

AXA Investment Managers priced $369.35 million of notes due Jan. 30, 2026 in the Allegro CLO I deal, according to market sources.

Allegro CLO I sold $213.8 million of class A-1 senior secured floating-rate notes (Aaa/AAA/) at Libor plus 145 bps; $45.7 million of class A-2 senior secured floating-rate notes (/AA/) at Libor plus 200 bps; $28.5 million of class B senior secured deferrable floating-rate notes (/A/) at Libor plus 275 bps; $19.1 million of class C senior secured deferrable floating-rate notes (/BBB/) at Libor plus 345 bps; $17 million of class D secured deferrable floating-rate notes (/BB/) at Libor plus 475 bps and $45.25 million of subordinated notes.

J.P. Morgan Securities LLC arranged the transaction.

The CLO has a two-year non-call period and a four-year reinvestment period.

The vehicle is backed by a revolving pool of U.S. dollar-denominated broadly syndicated senior secured corporate loans.

AXA Investment Managers, a subsidiary of part of Paris-based AXA Group, will manage the CLO.

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