HPS prices CLO, adopts Libor language; Och-Ziff, Hayfin print; Medalist reprices notes

By Cristal Cody

Tupelo, Miss., Aug. 6 – HPS Investment Partners, LLC priced $507.35 million of notes in the manager’s second CLO offering of 2019.

With the new CLO, HPS Investment Partners also is among the first CLO managers to adopt new Libor fallback language in the event the benchmark rate is phased out, according to a Covenant Review, LLC research report.

The Federal Reserve’s alternative reference rates committee released its final recommendations on Libor fallbacks for securitizations on May 31.

The Libor benchmark is expected to be phased out by 2021.

“We expect to see many more CLO managers using the ARRC’s recommended Libor fallback language in the near term,” Covenant Review said.

While no reported CLOs have priced with the new Secured Overnight Financing Rate, several investment-grade issuers have priced floating-rate notes this year based on the SOFR benchmark.

“The adoption of the ARRC Securitization Fallback by HPS and other CLO managers is another important step for the transition away from Libor,” the Covenant Review report said. “Syndicated loans and CLOs are systematically important segments of the floating rate debt ecosystem. Alignment between these two related markets will therefore be key to a smooth transition away from Libor.”

In other new CLO issuance, Och-Ziff Loan Management LP priced a $406.7 million deal.

Also, Hayfin Capital Management LLC sold €410.8 million of notes in a euro-denominated CLO offering.

Looking at the refinancing market, Medalist Partners Corporate Finance LLC, formerly known as JMP Credit Advisors LLC, repriced $285.75 million of the AAA-rated notes from a vintage 2017 CLO.

HPS prices $507.35 million

HPS Investment Partners priced $507.35 million of notes due July 22, 2032 in the manager’s second CLO offering year to date, according to a market source.

HPS Loan Management 15-2019 Ltd./HPS Loan Management 15-2019 LLC sold $307.5 million of class A-1 floating-rate notes at Libor plus 132 basis points and $17.5 million of class A-2 floating-rate notes at Libor plus 167 bps in the senior tranches.

BofA Securities, Inc. was the placement agent.

The deal is backed primarily by broadly syndicated first-lien senior secured loans.

The subsidiary of Highbridge Capital Management, LLC is based in New York City.

Och-Ziff brings CLO

Och-Ziff Loan Management priced a new $406.7 million CLO transaction, according to a market source.

OZLM XXIV, Ltd./OZLM XXIV, LLC sold $219 million of class A-1A floating-rate notes at Libor plus 139 bps at the top of the capital stack.

BNP Paribas Securities Corp. arranged the deal.

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

Och-Ziff is an affiliate of New York City-based alternative asset management company Och-Ziff Capital Management Group LLC.

Hayfin prints CLO

Hayfin Capital Management sold €410.8 million of notes due Oct. 15, 2032 in a new European broadly syndicated CLO offering, according to a market source.

Hayfin Emerald CLO III DAC priced the €248 million of class A senior secured floating-rate step-up notes at par to yield Euribor plus 110 bps.

Citigroup Global Markets Ltd. was the placement agent.

The deal is backed primarily by senior secured obligations.

Hayfin has priced two euro-denominated CLOs year to date.

Hayfin Capital Management is part of London-based alternative asset management firm Hayfin Capital Management LLP.

Medalist reprices

Medalist Partners Corporate Finance refinanced $285.75 million of the AAA-rated notes from the JMP Credit Advisors CLO IV Ltd./JMP Credit Advisors CLO IV LLC transaction, according to a market source and a notice of revised supplemental indenture on Monday.

The CLO priced the class A-R senior secured floating-rate notes (expected ratings Aaa//AAA) at Libor plus 128 bps.

BNP Paribas Securities is the refinancing placement agent.

Medalist Partners Corporate Finance, which acquired a majority stake in JMP Credit Advisors in March, will manage the CLO.

The notes are due July 17, 2029.

The CLO has a one-year non-call period.

In the original $456.87 million offering issued June 29, 2017, the CLO priced $285.75 million of the class A senior secured floating-rate notes at Libor plus 137 bps.

Proceeds from the refinancing will be used to redeem the outstanding class A notes.

The CLO is backed by a portfolio of broadly syndicated first-lien senior secured leveraged loans.

Medalist Partners Corporate is a New York-based alternative investment manager.

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