Buckhead, Sound Point refinance; Five Arrows offers $302.2 million CLO; outflows rise

By Cristal Cody

Tupelo, Miss., Sept. 11– Buckhead One Financial Opportunities, LLC issued $104.25 million of notes on Thursday in a partial refinancing of a 2017 static CDO.

The refinancing was first announced in March as the primary markets were closing in response to the Covid-19 pandemic. The securitized refinancing space resumed activity in late July.

Also in refinancing action, Sound Point Capital Management LP sold $20 million of notes in a refinancing of fixed-rate notes from a 2018 broadly syndicated CLO.

Meanwhile, Five Arrows Managers North America LLC plans to bring its third new CLO offering of the year to the primary market. The company is marketing a $302.2 million CLO.

More than $49 billion of broadly syndicated CLOs have priced year to date, according to market sources.

The refinancing space has seen more than $26 billion of volume so far this year.

In other activity, leveraged loan funds outflows totaled $260 million for the past week ended Wednesday, up from $70 million in the prior week and $117 million in the week prior, Fitch Ratings said. Year-to-date redemptions total $19.3 billion.

Elsewhere, secondary volume ramped up on Thursday across the CBO/CDO/CLO capital stack, Trace data shows.

During the session, $624.48 million of high-grade CBO/CDO/CLO notes traded, compared to $209.99 million on Wednesday and $147.18 million on Tuesday.

Average prices for investment-grade tranches improved to 98.40 on Thursday from 98.10 on Wednesday but remained off of Tuesday’s average of 99.40.

Also on Thursday, $456.64 million of non-investment-grade issues were traded, compared to $112.49 million on Wednesday and $516.94 million on Tuesday.

Lower-rated CBO/CDO/CLO paper averaged 75.20 on Thursday, compared to an average 83.40 on Wednesday and 72.20 on Tuesday.

Buckhead prices

Buckhead One Financial Opportunities priced $104.25 million of notes due Jan. 25, 2029 in the partial refinancing of the BNFS 2017-1/BNFS 2017-1 LLC static CDO transaction, according to a market source.

The CDO sold $104.25 million of 3.25% class A-R senior secured fixed-to-floating rate notes due Jan. 25, 2029 (Aa2).

Nomura Securities International, Inc. was the refinancing agent.

The CDO was originally issued on Jan. 11, 2018 and included $104.3 million of class A senior secured floating-rate notes.

Buckhead announced plans to refinance the notes on March 13.

The CDO is collateralized by a portfolio of debt from U.S. community banks.

Buckhead One Financial Opportunities is an Atlanta-based asset management firm.

Sound Point refinances

Sound Point Capital Management sold $20 million of notes due April 15, 2031 in two tranches in a partial refinancing of a vintage 2018 broadly syndicated CLO transaction, according to a market source.

Sound Point CLO XIX, Ltd. priced $5 million of 2.73% class B-2a-R senior secured fixed-rate notes (Aa2) and $15 million of class B-2b-R senior secured floating-rate notes at Libor plus 235 basis points.

The original class B-2 senior secured fixed-rate notes were issued in a $20 million tranche in the CLO offering on May 3, 2018 with a 4.15% coupon.

Goldman Sachs & Co. LLC was the refinancing agent.

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

The asset management firm is based in New York.

Five Arrows plans deal

Five Arrows Managers intends to sell $302.2 million of notes due Oct. 15, 2031 in the new Ocean Trails CLO X/Ocean Trails CLO X LLC broadly syndicated transaction, according to a market source.

The deal includes $160 million of class A-1 floating-rate notes (Aaa), $20 million of class A-2 floating-rate notes (Aaa), $22.5 million of class B-1 floating-rate notes and $22.5 million of class B-2 fixed-rate notes.

The offering also is expected to include $19.5 million of class C deferrable floating-rate notes, $15 million of class D deferrable floating-rate notes, $10.5 million of class E deferrable floating-rate notes and $32.2 million of subordinated notes.

Natixis Securities Americas LLC is the placement agent.

The CLO is backed primarily by broadly syndicated senior secured loans.

Settlement is expected on Oct. 29.

The Los Angeles-based investment manager is a subsidiary of Rothschild North America Holdings, Inc.

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