CLO market mulls possible rules suspension; York prices $408 CLO; CVC refinances

By Cristal Cody

Eureka Springs, Ark., Nov. 10 – CLO issuance and refinancing action remains strong ahead of risk retention regulations that take effect in December.

Meanwhile, regulations that fall under the Dodd-Frank Act may be removed when Donald Trump takes office.

Moody’s Investors Service said in a news release that Donald Trump’s victory in the presidential election will impact a range of companies and policy areas, including trade, health care, immigration and corporate taxes.

“In the area of financial sector regulation, Trump has stated his intention to temporarily suspend all new regulation and also proposed eliminating the Dodd-Frank Act,” Moody’s said. “While a reduction in regulatory compliance costs would bolster bank earnings, reduced oversight and a roll-back of requirements would also result in a weakening of banks' capital and liquidity positions, a negative from a credit perspective.”

In new issuance, York CLO Managed Holdings, LLC priced $403.2 million of notes in the firm’s second CLO deal of 2016. The CLO does not comply with U.S. or European risk retention regulations but does not permit the purchase of bonds and letters of credit to address Volcker Rule concerns.

CVC Credit Partners, LLC priced a $370.65 million refinancing and reset of a vintage 2013 CLO deal.

U.S. CLO volume totals more than $90 billion, while more than $18 billion of U.S. CLOs have been refinanced year to date.

In the secondary market, $64.1 million of high-grade CBO/CDO/CLO issues and $271 million of non-investment-grade securities traded on Wednesday, according to Trace.

Market volume on Tuesday included $195.02 million of investment-grade issues and $106.3 million of non-high-grade securities. Trading volume on Monday totaled $346.45 million in high-grade issues and $269.21 million in non-investment-grade securities.

York prices $408 million CLO

York CLO Managed Holdings priced $403.2 million of notes due Jan. 20, 2030 in the CLO deal, according to a market source.

York CLO-4 Ltd./York CLO-4 LLC sold $252 million of class A floating-rate notes at Libor plus 163 basis points in the senior tranche.

Morgan Stanley & Co. LLC arranged the offering.

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

York has priced two CLOs in 2016. The firm priced one CLO deal in 2014 and in 2015.

The New York City-based firm is a subsidiary of York Capital Management Global Advisors, LLC.

CVC refinances CLO

CVC Credit Partners sold $370.65 million of CLO notes due Oct. 17, 2028 in a refinancing and reset of a 2013 transaction, according to a market source and a notice of revised proposed supplemental indenture.

Apidos CLO XI/Apidos CLO XI LLC priced $254.35 million of class A-R floating-rate notes at Libor plus 144 bps at the top of the capital structure.

J.P. Morgan Securities LLC was the underwriter.

The maturity on the new notes was extended from the original Jan. 17, 2023 due date. The refinanced CLO also has a non-call period ending Oct. 17, 2018 and a reinvestment period ending Oct. 17, 2020.

The original $42.6 million tranche of subordinated notes will remain outstanding. In addition, the CLO manager will issue $2.4 million of additional subordinated securities.

The refinanced notes, class X notes and additional subordinated notes were issued as Rule 144A, Regulation S and certificated global securities.

Proceeds from the transaction were used to redeem the original notes.

CVC Credit Partners has priced two new CLOs and refinanced one CLO year to date.

The New York-based subsidiary of London-based CVC Capital Partners Ltd. placed three new CLO deals and one refinanced CLO in 2015.

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