MidOcean prices $518 million CLO; June issuance remains strong; Golub to refinance CLO

By Cristal Cody

Tupelo, Miss., June 23 – Primary action in the CLO market is expected to stay active through the last full week of the month, following a $518 million offering from MidOcean Credit Fund Management LP on Monday.

MidOcean Credit Fund priced the AAA tranche at Libor plus 146 basis points, according to a market source.

More than $10 billion of CLOs have priced in June.

CLO refinancing activity also continues to be active, according to market sources.

Golub Capital announced plans to refinance $306.13 million of notes in a CLO brought in 2011.

MidOcean prices $518 million

MidOcean Credit Fund Management sold $518 million of notes due July 21, 2026 in the CLO deal, according to a market source.

MidOcean Credit CLO III/MidOcean Credit CLO III LLC priced $312.5 million of class A floating-rate notes (Aaa/AAA/) at Libor plus 146 bps.

The CLO sold $62.5 million of class B floating-rate notes (/AA/) at Libor plus 200 bps; $36.25 million of class C deferrable floating-rate notes (/A/) at Libor plus 290 bps; $27.5 million of class D deferrable floating-rate notes (/BBB/) at Libor plus 375 bps; $23.75 million of class E deferrable floating-rate notes (/BB/) at Libor plus 525 bps and $11.25 million of class F deferrable floating-rate notes (/B/) at Libor plus 600 bps.

The offering included $44.25 million of income notes in the equity tranche.

Credit Suisse Securities (USA) LLC arranged the deal.

MidOcean Credit Fund will manage the CLO.

Collateral consists of broadly syndicated senior secured corporate loans.

The affiliate of New York City-based private equity firm MidOcean Partners has priced a total of three CLO deals since January 2013.

Golub to refinance CLO

Golub Capital plans to refinance $306.13 million of Rule 144A and Regulation S eligible global secured notes due Oct. 20, 2021 in the Golub Capital Partners CLO 10, Ltd./Golub Capital Partners CLO 10, LLC transaction, according to a notice of optional redemption and a market source.

Golub CLO 10, originally priced in 2011, will refinance $197 million of class A senior secured floating-rate notes (Aaa/AAA/), $12.5 million of class B senior secured floating-rate notes (/AA/), $31.75 million of class C deferrable floating-rate notes (/A/) and $16 million of class D deferrable floating-rate notes (/BBB/).

The refinanced CLO also will include the original tranches of $15 million of class E deferrable floating-rate notes (/BB/), $9 million of class F deferrable floating-rate notes (/B/) and $24.88 million of subordinated notes. The spreads on the class E and F tranches are Libor plus 520 bps, according to the notice.

Wells Fargo Securities LLC is the refinancing agent.

GC Investment Management LLC and GC Advisors LLC are the CLO managers.

Golub Capital Partners Holdings Ltd. is the majority holder of the subordinated notes.

Proceeds from the refinancing will be used to redeem the existing notes on July 21.

Golub Capital was last in the CLO primary market on May 14 with the $401.8 million Golub Capital Partners BDC CLO 2014 LLC transaction.

The New York-based middle market lender brought three CLO deals in 2013.

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