CSAM prices $815 million CLO; NewStar beefs up with acquisition of Fifth Street CLO business

By Cristal Cody

Tupelo, Miss., July 7 – Credit Suisse Asset Management, LLC priced $815 million of notes in a new CLO offering.

About $44 billion of new CLOs have priced and nearly $100 billion of vintage CLOs have been refinanced year to date, according to market sources and Prospect News data.

Market analysts expect as much as $90 billion of new issue volume for the year.

In other activity, Fifth Street Asset Management Inc. announced on Friday that it will sell Fifth Street CLO Management LLC to NewStar Financial, Inc. for about $16 million, subject to adjustment up or down based on certain working capital items at closing.

Fifth Street CLO Management, formed in 2015 to manage Fifth Street’s middle-market CLO business, was last in the CLO primary market in 2015.

Boston-based NewStar has priced one new middle-market CLO in 2017 and priced two middle-market CLOs in 2016.

“Over the course of FSAM’s strategic review, it became clear to us that given the market environment and headwinds we faced over the past year and a half, it would be difficult to scale our CLO business,” Leonard M. Tannenbaum, chief executive officer of Fifth Street Asset Management, said in the release. “We believe that exiting this business line is in the best interest of our shareholders and is an important step as we continue to enhance our liquidity position and streamline operations.”

The alternative asset management firm is based in Greenwich, Conn.

Middle-market issuers have priced more than $7 billion of CLOs year to date, compared to $8.25 billion of middle-market CLOs priced in all of 2016, according to BofA Merrill Lynch.

CSAM prices $815 million

Credit Suisse Asset Management sold $815 million of notes due July 27, 2030 in the new Madison Park Funding XXIII Ltd./Madison Park Funding XXIII LLC deal, according to market sources.

The CLO priced $488 million of class A floating-rate notes at Libor plus 121 basis points in the AAA-rated tranche.

Morgan Stanley & Co. LLC arranged the deal.

The notes are collateralized primarily by broadly syndicated first lien senior secured loans.

Credit Suisse Asset Management has priced one new dollar-denominated CLO and refinanced six vintage U.S. CLOs year to date.

The unit of Credit Suisse Group AG priced three U.S. CLOs and refinanced one vintage CLO in 2016.

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