Fifth Street brings $309.45 million middle-market CLO deal; secondary market active

By Cristal Cody

Tupelo, Miss., Feb. 2 – Fifth Street Management LLC brought a $309.45 million middle-market CLO deal, the year’s first offering in the space, according to an informed source on Monday.

The AAA-rated tranche of notes was placed at Libor plus 200 basis points.

Middle-market CLO issuance totaled $6.8 billion in 2014, according to BofA Merrill Lynch.

CLO secondary market activity picked up in the U.S. market over the previous week, according to BofA Merrill Lynch.

Bids-wanted-in-competition volumes totaled about $580 million and were dominated by U.S. CLO 2.0 and 3.0 deals, BofA Merrill Lynch analysts said in a note.

“Volcker compliant senior notes from the 2014 vintage traded fairly well as spread levels compressed to the low 150 DM for better-quality deals,” the analysts said.

Fifth Street Management priced $309.45 million of notes due Jan. 20, 2027 in a middle-market broadly syndicated CLO offering, a source said.

Fifth Street Senior Loan Fund I, LLC sold $172.5 million of class A floating-rate notes at Libor plus 200 bps at the top of the capital structure.

At the bottom of the stack, the CLO priced $12 million of class F deferrable floating-rate notes at Libor plus 750 bps.

Wells Fargo Securities LLC was the placement agent.

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