OHA VI refinances; Anchorage Capital preps CLO; possible rate hike worries equity holders

By Cristal Cody

Tupelo, Miss., Aug. 7 – The number of CLOs refinanced year to date rose to 25 following Oak Hill Advisors LP’s refinancing of a vintage deal, according to market sources.

Oak Hill Advisors refinanced $572 million of notes in the OHA Credit Partners VI Ltd. transaction.

Most refinancing activity has taken place between six and 12 months after the end of the non-call period, according to a BofA Merrill Lynch market note.

In many of the deals, “the AAA spread appears to have been refinanced to around 15-30 [basis points] lower than where we estimate new issue spread levels were at the time of refinancing,” the note said.

Looking ahead to the new deal calendar, Anchorage Capital Group, LLC plans to price a $517.5 million CLO.

CIFC Corp. also announced plans on Friday to bring its first risk retention-compliant CLO deal before the end of the year.

More than $76 billion of CLOs have priced year to date, according to data compiled by Prospect News.

In other market activity, the possibility of a fall rate hike by the Federal Reserve has caused some concerns for CLO equity investors, according to a Barclays Bank plc market note on Friday.

“While CLO creation has exceeded most expectations so far in 2015, investors’ appetite for equity has been the constraining factor,” Barclays analysts said in the note.

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