CBAM prices $1 billion; PGIM resets 2015 CLO; BlackRock refinances €474 million notes

By Cristal Cody

Tupelo, Miss., March 15 – CBAM CLO Management LLC sold $1,000,750,000 of notes in the firm’s first CLO deal of 2018.

CBAM brought three $1 billion-plus CLO transactions to the primary market in 2017.

In refinancing action, PGIM, Inc. priced $566.1 million of notes in a refinancing and reset of a 2015 CLO offering.

PGIM has priced one new CLO and refinanced one vintage CLO year to date.

KKR Financial Advisors II, LLC also closed on the refinancing and reset of the vintage 2015 KKR Financial CLO 13 Ltd./KKR Financial CLO 13 LLC deal on Monday, a source said. Final pricing details were not immediately available.

The European market also is seeing refinancing activity. BlackRock Investment Management (UK) Ltd. priced €474 million of notes in a refinancing and reset of a vintage 2016 deal.

Fitch Ratings noted in a news release on Thursday that some managers have elected to vary the reinvestment periods as they reset CLOs.

“Of the 31 managers that have or will close more than one reset in the year through March 30, 14 have varied the reinvestment period used by more than one year in CLOs they have reset during this period,” Fitch said. “Those periods ranged from 1.8 years to 6.0 years.”

In resets expected to close by the end of March, Anchorage Capital Group, LLC has reset CLOs with two-, four- and five-year reinvestment periods, while KKR, Neuberger Berman Loan Advisers LLC and PGIM have reset CLOs with two-year and over five-year reinvestment periods, Fitch said.

“Shortening the reinvestment period has allowed managers to price the notes at lower levels due to the reduced risk horizon,” Fitch said. “On three transactions with shorter than two years of reinvestment, the average senior AAA spread is 85.7 [basis points]. This compares to 107.4 bps average for the 26 reset deals expected to close in 1Q18 that have reinvestment periods of four years or longer.”

CBAM brings 2018-5 CLO

In the new CLO issuance, CBAM CLO Management sold $1,000,750,000 of notes due April 17, 2031, according to market sources.

The CBAM 2018-5, Ltd./CBAM 2018-5 LLC vehicle priced $640 million of class A floating-rate notes at Libor plus 102 bps in the senior tranche.

Credit Suisse Securities (USA) LLC was the placement agent.

The class A notes have a 1.5-year non-call period, while the remaining tranches have a two-year non-call period. The CLO has a five-year reinvestment period.

Proceeds will be used to purchase a portfolio of about $1 billion of mostly first-lien senior secured leveraged loans.

CBAM, an affiliate of New York-based asset management firm CBAM Partners, LLC, priced three $1 billion-plus CLO transactions in 2017.

PGIM reprices Dryden 41

PGIM priced $566.1 million of notes in a refinancing and reset of the Dryden 41 Senior Loan Fund/Dryden 41 Senior Loan Fund LLC deal, according to a notice of executed first supplemental indenture on Wednesday.

The CLO sold $357.5 million of class A-R senior secured floating-rate notes at Libor plus 97 bps at the top of the capital structure.

Barclays was the refinancing placement agent.

The maturity on the refinanced notes was extended to April 15, 2031 from the original Jan. 15, 2028 maturity.

The reset CLO also has a two-year non-call period and a five-year reinvestment period.

In the original $512.2 million deal issued on Oct. 29, 2015, Dryden 41 had priced $320.75 million of class A floating-rate notes at Libor plus 150 bps.

Proceeds were used to redeem the original notes.

PGIM has priced one new CLO and refinanced one vintage CLO year to date.

The asset management firm, part of Newark, N.J.-based Prudential Investment Management, Inc., refinanced four vintage dollar-denominated CLOs in 2017.

BlackRock refinances CLO

BlackRock Investment Management (UK) priced €474 million of notes in a refinancing and reset of the vintage 2016 BlackRock European CLO I DAC transaction, according to market sources.

Final print details were not immediately available.

Credit Suisse Securities (Europe) Ltd. was the refinancing placement agent.

The maturity on the notes was extended to March 15, 2031 from the original March 15, 2029 maturity.

The reset CLO also has a two-year non-call period and a four-year reinvestment period.

The CLO was originally issued on Feb. 25, 2016.

Proceeds from the refinancing were used to redeem the original notes on Thursday at par.

The investment management firm is a London-based subsidiary of BlackRock, Inc.

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