U.S. CLO issuance forecast as brisk in 2015; Onex prices $513.7 million OCP CLO 2014-7

By Cristal Cody

Tupelo, Miss., Nov. 14 – U.S. CLO issuance is expected to stay brisk into 2015 ahead of the finalized risk retention rules that take effect in 2016, according to market participants.

“The finalization of the U.S. risk retention rules last month provided some clarity on the future of the CLO market,” Barclays analysts said in a note on Friday. “New CLO creation will likely diminish once the legislation is instated in late 2016. Until then, we expect higher issuance volumes as managers pull forward deals that will then be grandfathered into the new regime.”

Under the Dodd-Frank Act requirements, CLO managers must retain 5% capital of new deals beginning in 2016. U.S. CLOs brought before Oct. 21, 2016 will be grandfathered.

U.S. CLO issuance already has climbed to more than $114 billion, according to data compiled by Prospect News.

CLO issuance in 2015 is forecast at $100 billion to $120 billion, Barclays said.

In primary activity, Onex Credit Partners, LLC, which brought a $1 billion CLO deal in May, priced a $513.7 million CLO offering via Citigroup Global Markets Inc., according to a market source.

OCP CLO 2014-7 Ltd./OCP CLO 2014-7 Corp. priced $285 million of class A-1a senior secured floating-rate notes at Libor plus 160 basis points at the top of the capital structure.

© 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.