Mariner sells CLO; American Capital, Neuberger refinance; Invesco on tap; spreads recover

By Cristal Cody

Eureka Springs, Ark., July 11 – Mariner Investment Group, LLC tapped the U.S. CLO primary market, while two CLO managers refinanced parts of vintage deals.

Mariner Investment Group priced a $503.4 million CLO transaction.

American Capital CLO Management, LLC refinanced $160 million of notes in a vintage 2013 deal.

Neuberger Berman Fixed Income LLC refinanced $183 million of notes in one tranche from a vintage CLO.

“There has been a recent uptick of U.S. CLO refinancings, with all three refinancings over the past two weeks involving tranches with step-ups,” J.P. Morgan Securities LLC analysts said in a note. “In the wake of Brexit, U.S. CLO pricing has been resilient with U.S. CLO 2.0 equity prices at end-June the highest all year. Some of the strength is the positive impact of a flatter Libor curve.”

As previously reported, Carlyle Investment Management LLC refinanced $150 million of notes due Oct. 15, 2025 in two tranches in the Carlyle Global Market Strategies CLO 2013-4, Ltd./Carlyle Global Market Strategies CLO 2013-4 LLC deal.

The market has seen $1,007,000,000 of refinancings in five deals year to date, including $343 million in June, according to BofA Merrill Lynch Global Research. No CLOs were refinanced in April or May.

Looking ahead to new issuance, Invesco Senior Secured Management, Inc. is in the deal pipeline with a $408.4 million CLO offering.

In the secondary market, U.S. AAA CLOs tightened 5 basis points to end the previous week at the Libor plus 155 bps area, according to BofA Merrill Lynch.

Further down the stack, AAs and As tightened 10 bps and BBBs traded 15 bps tighter on the week.

BB-rated CLO notes came in 50 bps on the week to the Libor plus 975 bps area, while Bs also firmed 50 bps over the week to the Libor plus 1,450 bps area.

“The secondary U.S. market had another relative slow summer week with BWIC volumes totaling only about $130 [million],” BofA Merrill Lynch analysts said in the note. “Volumes were concentrated in post-crisis deals which saw decent bidding activity as investors tried to add exposure at wider levels driven by the outcome of the Brexit vote. There has, however, been minimal trading at the lower bid levels with most investors choosing to hold on to their positions.”

European CLOs firmed 10 bps to 40 bps across the capital stack over the past week, according to BofA Merrill Lynch. Euro-denominated AAAs ended the week 10 bps tighter at Euribor plus 145 bps area.

Mariner prices $503.4 million

Mariner Investment Group priced $503.4 million of notes in the Mariner CLO 2016-3 LLC deal, according to a market source.

The CLO sold $330 million of class A floating-rate notes at Libor plus 159 bps in the senior tranche.

Citigroup Global Markets Inc. was the placement agent.

Mariner Investment Group brought its first CLO deal in December 2014 and priced one CLO offering in 2015.

The alternative asset management firm is based in New York City.

American Capital refinances

CLO manager American Capital CLO Management refinanced $160 million of notes in three tranches in the ACAS CLO 2013-2, Ltd. transaction, according to a market source.

The CLO sold $140 million of class A-1B-R senior secured floating-rate notes at par to yield Libor plus 145 bps.

The original class A-1B notes priced at Libor plus 110 bps, which stepped up to Libor plus 160 bps in April 2015 and to Libor plus 190 bps in April 2016.

Citigroup was the refinancing agent.

American Capital CLO Management originally sold $414.2 million of notes due Oct. 25, 2025 in the ACAS CLO 2013-2 deal on Aug. 28, 2013. The remaining tranches were not refinanced.

Proceeds from the refinancing will be used to redeem the original class A-1B, A-1C and A-2B notes.

The ACAS CLO 2013-2 vehicle was revised to comply with Volcker Rule regulations in a first supplemental indenture dated June 15, 2016.

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

American Capital CLO Management previously was in the primary market on March 15 with the $405.48 million ACAS CLO IX, Ltd./ACAS CLO IX LLC deal.

The subsidiary of Bethesda, Md.-based private equity firm and asset manager American Capital Asset Management, LLC priced two CLO transactions in 2015.

Neuberger Berman refinances

Neuberger Berman Fixed Income refinanced $183 million of notes due July 25, 2023 in one tranche from a vintage CLO deal, according to a market source.

Neuberger Berman CLO XII, Ltd./Neuberger Berman CLO XII, LLC priced $183 million of class A-2R-R floating-rate notes at par to yield Libor plus 130 bps.

The CLO brought the class A-2R replacement notes in a refinancing on July 11, 2014 at Libor plus 115 bps, which stepped up to Libor plus 190 bps after two years. The notes originally were sold in August 2012.

Citigroup was the refinancing agent.

The transaction is backed primarily by broadly syndicated senior secured loans.

Neuberger Berman Fixed Income also has priced one new CLO deal year to date.

The Chicago-based firm is part of Neuberger Berman Group, LLC was in the CLO primary market with two transactions in 2015.

Invesco offers $408.4 million

Invesco Senior Secured Management plans to price a $408.4 million CLO via Barclays, according to a market source.

The Annisa CLO, Ltd./Annisa CLO, LLC deal includes $256 million of class A floating-rate notes (//AAA); $46 million of class B floating-rate notes; $24 million of class C floating-rate notes; $24 million of class D floating-rate notes; $18 million of class E floating-rate notes and $40.4 million of subordinated notes.

Invesco RR Fund, LP will manage the CLO.

The CLO is backed primarily by first-lien senior secured leveraged loans.

Proceeds will be used to purchase a portfolio of about $400 million of mostly senior secured leveraged loans.

Invesco has priced one CLO offering year to date.

The subsidiary of Atlanta-based Invesco, Ltd. sold two CLOs in 2015.

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