Octagon refinances step-up notes; managers refinance 12 CLOs to date; more supply eyed

By Cristal Cody

Eureka Springs, Ark., Sept. 2 – Octagon Credit Investors, LLC refinanced an $85 million step-up tranche in a vintage CLO deal on Friday.

Most recently, Crescent Capital Group LP refinanced $350.25 million of notes due Jan. 30, 2024 in the Atlas Senior Loan Fund II, Ltd. transaction.

The latest deals bring year-to-date refinancing volume to about $3 billion from 12 refinanced CLO transactions, according to market sources.

The new issue market is poised for strong action in September, with most markets expecting supply and refinancings to continue, sources report.

Deals in the near-term pipeline include Octagon’s $605 million Octagon Investment Partners 28, Ltd./Octagon Investment Partners 28, LLC transaction via Morgan Stanley & Co. LLC.

Crestline Denali Capital, LP also is offering $360,575,000 of notes in the Crestline Denali CLO XIV, Ltd./Crestline Denali CLO XIV LLC transaction. BNP Paribas Securities Corp. is the placement agent.

In its deal, Octagon Credit Investors refinanced $85 million of notes due Oct. 25, 2025 in the vintage 2013 Octagon Investment Partners XVII, Ltd. deal, according to a market source.

The CLO priced $85 million of class A-2-R senior secured floating-rate notes (Aaa/AAA) at Libor plus 168 bps.

The original class A-2 tranche priced at Libor plus 110 bps, then stepped up to Libor plus 160 bps from March 2, 2015 to March 2, 2016 and stepped up to Libor plus 190 bps thereafter.

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