Garrison Investment sells $410.09 million CLO; Voya refinances; PGIM offers €418.8 million

By Cristal Cody

Eureka Springs, Sept. 12 – Garrison Investment Group, LP priced $410.09 million of notes in a new CLO.

The deal brings the month’s issuance to three CLO offerings to date, but several transactions in the deal pipeline are expected to price over the next couple of weeks, according to market sources.

PGIM Ltd. plans to price €418.8 million of notes in the previously announced Dryden 46 Euro CLO BV transaction.

In other market activity, details emerged for Voya Alternative Asset Management LLC’s refinancing transaction. Voya refinanced $371.2 million of notes in a vintage 2012 CLO.

The market has seen about $3 billion of refinanced transactions year to date, compared to $10.46 billion last year, according to BofA Merrill Lynch.

The rising Libor yield is helping CLO spreads, according to J.P. Morgan Securities LLC.

The three-month Libor yield was up 2 basis points from Friday to 85 bps on Monday.

“Our near-term expectation is for U.S. CLO AAA spreads to tighten,” the analysts said in a note released on Monday. “Technicals will remain strong, as anecdotally, the forward calendar is littered with refinancings and resets. Further, demand for senior CLO paper is steady and should be aided by rising Libor, which has contributed to a 22% rise in the current coupon of AAA CLOs in our index this year.”

Euro mezzanine firms

In the secondary market, $440 million of bonds appeared on BWIC lists over the previous week, according to a BofA Merrill Lynch note.

“Interest focused on triple-A post-crisis CLOs, and triple-A spreads subsequently tightened 5 bps,” the analysts said in the note. “There was little activity across the mezzanine tranches, and spreads mostly remained unchanged.”

CLO AAAs ended Friday 5 bps tighter on the week at Libor plus 140 bps. The rest of the stack ended the week flat.

About €65 million appeared on BWIC lists in the European CLO secondary market, BofA Merrill Lynch analysts said.

In Europe, most of the stack was unchanged, according to the note. Euro-denominated BB notes tightened 40 bps to Euribor plus 650 bps, while B-rated tranches traded 20 bps tighter on the week at Euribor plus 880 bps.

Garrison brings $410 million

Garrison Investment Group priced $410.09 million of notes in the Garrison Funding 2016-1 Ltd./Garrison Funding 2016-1 LLC deal, according to a market source.

The CLO sold $254 million of class A-1 floating-rate notes at Libor plus 169 bps at the top of the capital structure.

Deutsche Bank Securities Inc. was the placement agent.

Garrison Investment was last in the CLO primary market in 2015 with one transaction.

The middle market credit and asset investment firm is based in New York City.

Voya refinances

Voya Alternative Asset Management refinanced $371.2 million of notes in five tranches at par in the Voya CLO 2012-4, Ltd./Voya CLO 2012-4 LLC transaction, according to a market source.

The CLO sold $262 million of class A-1-R floating-rate notes at Libor plus 145 bps in the senior tranche.

The maturity on the refinanced notes was extended to Oct. 15, 2028 from the original Oct. 15, 2023 due date.

Citigroup Global Markets Inc. was the refinancing agent.

Proceeds will be used to refund the original notes on Sept. 22.

Voya Alternative Asset Management has priced two new CLOs and refinanced one vintage transaction year to date.

The affiliate of New York City-based Voya Investment Management LLC priced three CLOs and refinanced two vintage CLO deals in 2015.

PGIM offers €418.8 million

PGIM plans to price €418.8 million notes due Jan. 15, 2030 in the Dryden 46 Euro CLO offering, according to a market source.

The deal is expected to include €208.5 million of class A-1 senior secured floating-rate notes (Aaa/AAA); €31.5 million of class A-2 senior secured fixed-rate notes (Aaa/AAA); €38.05 million of class B-1 senior secured floating-rate notes (Aa2/AA); €12.95 million of class B-2 senior secured fixed-rate notes (Aa2/AA); €22.6 million of class C mezzanine secured deferrable floating-rate notes (A2/A); €21.4 million of class D mezzanine secured deferrable floating-rate notes (Baa2/BBB); €23.9 million of class E mezzanine secured deferrable floating-rate notes (Ba2/BB); €11.8 million of class F mezzanine secured deferrable floating-rate notes (B2/B-) and €48.1 million of subordinated notes.

Barclays is the placement agent.

The notes have a non-call period ending Jan. 15, 2019 and a reinvestment period ending Jan. 15, 2021.

The deal is collateralized mainly by senior secured loans and bonds.

The offering is expected to close on Nov. 4.

PGIM was last in the primary market with the €412.9 million Dryden 44 Euro CLO 2015 BV transaction on April 29.

The affiliate of Prudential Financial Inc. is based in London.

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