Greywolf refinances CLO; Highland plans reissue of 2014 CLO; investor demand eyed

By Cristal Cody

Tupelo, Miss., Jan. 26 – The CLO refinancing space remains active with a steady pipeline expected by market sources.

Details emerged on a $649 million reissue that Greywolf Capital Management LP priced in January.

Coming up, Highland CLO Management, LLC plans to refinance $424.25 million of notes from a 2014 CLO.

After CLO issuance finished 2017 stronger than expected, investor appetite is likely to remain robust in 2018 for new issuance and refinanced securities, according to a Fitch Ratings news release on Thursday.

Just in the fourth quarter, 52 new U.S. CLOs totaling $29 billion came to the market, while refinancings and resets were “prevalent” with 54 U.S. CLOs refinancing or resetting liabilities of more than $29 billion, Fitch said.

“CLO managers have taken advantage of optimum financing conditions and are refinancing liabilities as soon as transactions exit their non-call periods,” Kevin Kendra, managing director and U.S. group head at Fitch, said in the release.

Greywolf reprices CLO V

Greywolf Capital Management priced $649 million of notes in a refinancing and reset of a vintage 2015 collateralized loan obligation, according to a market source.

Greywolf CLO V, Ltd./Greywolf CLO V, LLC priced the $420 million tranche of class A-1-R senior secured floating-rate notes at Libor plus 116 basis points.

Goldman Sachs & Co. LLC arranged the deal.

Greywolf Loan Management LP is the CLO manager.

The maturity on the refinanced notes was extended to January 2031 from the original April 25, 2027 maturity.

The CLO was originally issued on April 29, 2015. In the first issuance, the CLO priced $421.5 million of class A-1 floating-rate notes at Libor plus 160 bps.

Greywolf Capital Management is a Purchase, N.Y.-based investment management firm.

Highland to reprice CLO

In other refinancing action, Highland CLO Management plans to refinance $424.25 million of notes from the vintage ACIS CLO 2014-3 Ltd. CLO 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 2028 from an initial due date of February 2028 and the original Feb. 1, 2026 maturity.

Mizuho Securities USA LLC is the refinancing placement agent.

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 original $416.75 million CLO was issued Feb. 25, 2014.

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

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