TPG prices $456 million CLO; Oaktree brings second deal; new issue BBB, BB spreads firm

By Cristal Cody

Tupelo, Miss., May 24 – TPG Institutional Credit Partners, LLC priced $456 million of notes in the manager’s first CLO transaction of the year.

In other new issuance, Oaktree Capital Management LP sold $504.7 million of notes in a CLO offering that closed on Thursday. The deal is Oaktree’s second new issue CLO transaction priced year to date.

CLO primary and secondary spreads have improved this week, according to a Wells Fargo Securities LLC analysts’ note on Friday.

In the primary market, AAA-rated tranches were quoted modestly better in the Libor plus 130 basis points area, about 4 bps tighter from a week ago.

New issue BBB spreads firmed to the Libor plus 350 bps area compared to the 375 bps area in late April, the analysts said.

Also, primary BB spreads have improved to the Libor plus 650 bps area versus the Libor plus 705 bps area in mid-April.

Meanwhile, in the past five weeks, secondary CLO AAA spreads have tightened 10 bps to 15 bps, while BB spreads have come in by 75 bps, the Wells Fargo note said.

“Spreads tightened again this week, despite a bevy of bid lists on Thursday,” the analysts said.

Broadly syndicated CLO AAAs were quoted in the secondary market at the Libor plus 115 bps area.

In other market activity, outflows from leveraged loans were little changed for the week ended May 22 at $510 million from a $550 million outflow a week earlier, Yuri Seliger, a credit strategist with BofA Securities Inc., said in a research note released on Friday.

TPG prints TICP CLO XIII

TPG Institutional Credit affiliate TICP CLO XIII Management, LLC sold $456 million of notes due July 15, 2032 in the TICP CLO XIII, Ltd./TICP CLO XIII, LLC offering, according to market sources.

In the AAA-rated tranche, the CLO priced $288 million of class A floating-rate notes at Libor plus 130 bps.

Goldman Sachs & Co. LLC was the placement agent.

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

TPG Institutional Credit Partners has priced one new CLO transaction year to date.

The investment management firm is based in Fort Worth, Tex.

Oaktree sells $504.7 million

Oaktree Capital Management sold $504.7 million of notes due April 15, 2031, according to a market source.

In the senior secured tranches, Oaktree CLO 2019-2 Ltd./Oaktree CLO 2019-2 LLC priced $297.5 million of class A-1A floating-rate notes (Aaa/AAA) at Libor plus 133 bps, $27.5 million of 4.16% class A-1B fixed-rate notes (Aaa/non-rated/) and $55 million of class A-2 floating-rate notes (non-rated/AA/) at Libor plus 220 bps.

Morgan Stanley & Co. LLC was the placement agent.

The issue is collateralized primarily by broadly syndicated senior secured corporate loans.

Oaktree has priced two new CLOs and refinanced one vintage CLO year to date.

The CLO manager priced one new dollar-denominated CLO in 2018.

The Los Angeles-based asset management firm is a subsidiary of Oaktree Capital Group, LLC.

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