Crescent Capital reprices $386.1 million CLO; Wells Fargo raises deal supply forecast

By Cristal Cody

Tupelo, Miss., May 18 – Crescent Capital Group LP sold $386.1 million of notes due Feb. 17, 2026 in a second refinancing of a vintage 2014 CLO.

More than $51 billion of CLOs have been refinanced and/or reset year to date, while more than $50 billion of new CLOs have priced this year, according to a Wells Fargo Securities, LLC note on Friday.

Supply is expected to stay strong in both the new issue and refinancing markets. On Friday, Wells Fargo Securities analysts raised their 2018 forecast for new U.S. CLO issuance by $25 billion, to $150 billion. The analysts also forecast $140 billion of refinancing and reset supply for the year.

“The U.S. CLO market has seen outsized supply in 2018 YTD led by a strong appetite for CLO equity, the repeal of risk retention and increased floating rate demand,” the analysts said in the note. “Assuming range-bound spreads and a benign credit environment, we expect the pace of CLO supply to continue through H2, as newer or smaller managers look to issue new deals, and as managers look to reset existing deals nearing the end of reinvestment.”

Wells Fargo analysts also said they expect €25 billion of new European CLO volume and €18 billion to €20 billion of refinancing and reset issuance for 2018. The new issue forecast is up from Wells Fargo’s previous estimate of €17.5 billion of new supply for the year.

Moody’s Investors Service said in a CLO report on Friday that it also expects European CLO issuance in 2018 “to be at least on par with the 2017 level of €18.8 billion, with refinancing and reset activity again comprising a significant share of the market.”

Crescent Capital reprices

In the U.S. refinancing transaction, Crescent Capital Group sold $386.1 million of notes due Feb. 17, 2026 from Atlas Senior Loan Fund IV, Ltd./Atlas Senior Loan Fund IV, LLC, according to a notice of executed second supplemental indenture on Wednesday.

Atlas Senior Loan Fund IV priced $226.8 million of class A-1L-RR senior secured floating-rate notes at Libor plus 68 basis points in the senior tranche.

BNPP Securities Corp. was the refinancing placement agent.

The CLO was originally issued Jan. 22, 2014 and partially refinanced Aug. 10, 2017.

Crescent Capital is an alternative asset management firm based in Los Angeles.

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