TCI sells $408.5 million CLO; Arrowpoint brings first deal since 2015; secondary flat

By Cristal Cody

Eureka Springs, Ark., June 6 – New CLO issuance includes offerings from TCI Capital Management, LLC and Arrowpoint Asset Management LLC, according to market sources on Monday.

TCI Capital Management priced a $408.5 million CLO deal.

Arrowpoint Asset Management sold $354.5 million of notes in the firm’s first transaction of the year.

J.P. Morgan Securities LLC analysts said in a note released on Monday that they have “seen an uptick in the number of U.S. managers from 22 in Q1 to 28 in Q2 so far, with 6 issuing in both quarters. Currently, there are 44 total managers, about half of the 86 managers that issued in 2015.”

In the U.S. secondary market, spreads ended the previous week flat across the capital stack, according to a BofA Merrill Lynch research note released on Monday.

AAA-rated CLO spreads were unchanged at Libor plus 155 basis points. B spreads were flat at Libor plus 1,450 bps.

BWIC volumes dropped 38% week over week to $330 million, BofA Merrill Lynch analysts said.

“Not a lot of color was observed down the cap stack,” the analysts said. “Investment-grade bonds were well bid and lower-tiered mezzanine tranches remained soft.”

TCI prices $408.5 million

TCI Capital Management sold $408.5 million of notes due July 17, 2028 in the TCI-Flatiron CLO 2016-1 Ltd./TCI-Flatiron CLO 2016-1 LLC transaction, according to a market source.

The CLO priced $256 million of class A floating-rate notes at Libor plus 156 bps in the senior tranche.

BofA Merrill Lynch arranged the offering.

TCI Capital is the collateral manager and NYL Investors LLC is the sub-advisor.

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

TCI Capital is a subsidiary of Saint Peter Port, Guernsey-based closed-ended investment company Tetragon Financial Group Ltd. and an affiliate of LCM Asset Management LLC.

Arrowpoint taps market

Arrowpoint Asset Management sold $354.5 million of notes in the Arrowpoint CLO 2016-5 Ltd./Arrowpoint CLO 2016-5 LLC deal, according to a market source.

The CLO priced $224 million of class A floating-rate notes at Libor plus 172 bps at the top of the capital structure.

Goldman Sachs & Co. was the placement agent.

Arrowpoint Asset Management will manage the CLO.

The CLO manager priced one CLO deal in 2015.

The Denver-based firm is the investment advisor arm of Meridian Funds.

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