Neuberger brings $375 million second CLO refinancing; Five Arrows reprices €281 million

By Cristal Cody

Tupelo, Miss., April 10 – Two CLO managers refinanced vintage deals in the U.S. and European markets, while overall refinancing supply is expected to ramp up now that CLO managers are no longer bound by risk retention regulations.

The U.S. Circuit Court for the District of Columbia on Thursday granted summary judgment in favor of the Loan Syndications and Trading Association over the rule that required CLO managers to retain 5% of a CLO deal.

The new repricing issue in the dollar market came from Neuberger Berman Loan Advisers LLC, which sold $375 million of notes in a second refinancing of a 2015 CLO.

In the euro-denominated space, Five Arrows Managers LLP repriced €281 million of notes from a 2016 CLO.

About $35 billion of dollar-denominated CLOs and nearly €4 billion of euro-denominated CLOs have been refinanced year to date, according to market sources.

Neuberger Berman refinances

Neuberger Berman Loan Advisers sold $375 million of notes due July 15, 2027 in a second refinancing of the vintage 2015 Neuberger Berman Loan Advisors CLO XIX, Ltd./Neuberger Berman Loan Advisors CLO XIX, LLC transaction, according to a notice of revised proposed supplemental indenture on Monday.

The CLO priced $254 million of class A-1-R2 senior secured floating-rate notes at Libor plus 80 basis points at the top of the capital structure.

BofA Merrill Lynch arranged the transaction.

The original $410.5 million CLO was issued on July 16, 2015. The CLO had priced $254 million of the class A-1 floating-rate notes at Libor plus 142 bps.

The notes were refinanced for the first time on July 17, 2017. In the $349 million first refinancing, the CLO sold $254 million of the class A-1-R senior secured floating-rate notes at Libor plus 105 bps.

The Chicago-based firm is part of Neuberger Berman Group, LLC.

Five Arrows resets CLO

Five Arrows Managers priced €281 million of notes in a refinancing and reset of a vintage 2016 CLO offering, according to a notice to noteholders on Tuesday.

Contego CLO III BV sold €2 million of class X senior secured floating-rate notes at par to yield Euribor plus 30 bps and €181.5 million of class A-R senior secured floating-rate notes at par to yield Euribor plus 77 bps in the senior tranches.

BNP Paribas, London Branch arranged the deal.

The maturity on the repriced notes was extended to Oct. 15, 2030 from the original April 2029 maturity.

In the original €307.8 million Contego CLO III deal issued April 26, 2016, the CLO sold €178.5 million of class A senior secured floating-rate notes at Euribor plus 153 bps.

Five Arrows Managers is a London-based subsidiary of the Rothschild Group.

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