LCM, Ares CLOs price; BlackRock refinances; September refinancing activity strong

By Cristal Cody

Eureka Springs, Ark., Sept. 19 – New CLO pricing action includes deals from LCM Asset Management LLC and Ares Management LP.

LCM Asset Management priced $448.6 million of notes at par in the deal.

Ares Management tapped the primary market with a $707 million CLO offering.

Also, BlackRock Financial Management, Inc. refinanced $612 million of notes at par in a vintage 2012 CLO.

“Refinancing activity remains elevated across leveraged finance and CLO markets,” J.P. Morgan Securities LLC analysts said in a note. “So far in September, refinancing activity has accounted for the highest percent of total monthly new issue volume in the loan market and second highest in the CLO market.”

Year to date, about $5.5 billion of CLOs have been refinanced, JPMorgan said.

In the secondary market, BWIC volume totaled $1.1 billion over the previous week, according to a BofA Merrill Lynch note.

“Spreads remain relatively stable, with some tightening in the less liquid tranches at the bottom of the capital stack,” the analysts said.

LCM prices $448.6 million

LCM Asset Management priced $448.6 million of notes due Oct. 15, 2028 at par in the LCM XXII LP/LCM XXII LLC offering, according to a market source.

The CLO sold $277.2 million of class A-1 floating-rate notes at Libor plus 148 basis points in the senior tranche.

Natixis Securities Americas LLC was the placement agent.

The deal is collateralized primarily by first-lien senior secured loans.

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

LCM Asset Management has priced three CLO transactions year to date.

The CLO manager brought three CLO deals and refinanced one vintage CLO in 2015.

The New York City-based asset management firm is a subsidiary of Tetragon Financial Group Ltd.

Ares prices upsized CLO

Ares Management priced $707 million of notes due Oct. 15, 2027 in the Ares XL CLO Ltd./Ares XL CLO LLC deal via Goldman Sachs & Co., according to market sources.

The CLO sold $424.9 million of class A-1 senior floating-rate notes (Aaa/AAA) at Libor plus 143 bps, $30.1 million of class A-2 senior floating-rate notes (Aaa) at Libor plus 165 bps and $75.6 million of class A-3 senior floating-rate notes (Aa2) at Libor plus 185 bps at the top of the capital stack.

The deal was upsized by $100 million.

Ares CLO Management II LLC will manage the CLO.

The transaction is collateralized mostly by U.S. and Canadian first-lien senior secured corporate loans.

Ares Management has priced two new CLO deals and refinanced one vintage CLO year to date.

The Los Angeles-based alternative asset management firm priced five CLOs and refinanced one vintage CLO in 2015.

BlackRock refinances

BlackRock Financial Management refinanced $612 million of notes due Jan. 15, 2025 at par in a vintage 2012 collateralized loan obligation deal, according to a market source.

Magnetite VII, Ltd./Magnetite VII LLC sold $372 million of class A-1R floating-rate notes at Libor plus 135 bps in the AAA-rated tranche.

Citigroup Global Markets Inc. was the refinancing agent.

Proceeds from the transaction will be used to redeem the original notes on Oct. 17.

The firm has priced one new CLO deal and refinanced one CLO year to date.

BlackRock priced four CLOs and refinanced one vintage CLO in 2015.

The investment management firm is based in New York City.

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