Highland tweaks terms of $424.25 million ACIS CLO 2014-3 reissue, adds equity tranche

By Cristal Cody

Tupelo, Miss., Jan. 26 – Highland CLO Management, LLC plans to refinance $424.25 million of notes from the vintage ACIS CLO 2014-3 Ltd. collateralized loan obligation transaction, according to a notice of revised proposed first supplemental indenture on Thursday.

The renamed Highland CLO 2014-3R Ltd./Highland CLO 2014-3R LLC offering includes $1.6 million of class X floating-rate notes (AAA expected); $254.7 million of class A-R floating-rate notes (AAA expected); $49.8 million of class B-R floating-rate notes (AA expected); $27.9 million of class C-R floating-rate notes (A expected); $17.9 million of class D-R floating-rate notes (BBB) and $18.1 million of class E-R floating-rate notes (BB expected) and $5 million of class F-R floating-rate notes (B expected).

The deal also is scheduled to include an additional tranche of $9.5 million of subordinated notes, as well as the existing $39.75 million of subordinated notes. The maturity on the notes now will be extended to May 20028 from an initial due date of February 2028 and the original Feb. 1, 2026 maturity.

Mizuho Securities USA LLC is the refinancing placement agent for the Rule 144A and Regulation S deal.

The management of the CLO will be transferred to Highland CLO Management after the refinancing from the original CLO manager, Acis Capital Management, LP.

The reset CLO will be non-callable through August 2019 and now will have a reinvestment period that ends in May 2020.

The original $416.75 million CLO was issued Feb. 25, 2014. The CLO sold $3.5 million of class A-X senior secured floating-rate notes at Libor plus 135 bps; $205 million of class A-1A senior secured floating-rate notes at Libor plus 151 bps; $25 million of 3.75% class A-1F senior secured fixed-rate notes; $15 million of class A-2A senior secured floating-rate notes at Libor plus 155 bps and $2 million of class A-2B senior secured floating-rate notes at Libor plus 200 bps.

The CLO also sold $56 million of class B senior secured floating-rate notes at Libor plus 223 bps; $29 million of class C deferrable floating-rate notes at Libor plus 250 bps; $19 million of class D deferrable floating-rate notes at Libor plus 312 bps; $17.5 million of class E deferrable floating-rate notes at Libor plus 475 bps; $5 million of class F deferrable floating-rate notes at Libor plus 560 bps and $39.75 million of subordinated notes.

Proceeds will be used to redeem the original notes.

Highland CLO Management is a Dallas-based asset management firm.

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