Voya prices $398.7 million; Granite Point sells CRE CLO; supply tops year ago pace

By Cristal Cody

Tupelo, Miss., Feb. 15 – Voya Alternative Asset Management LLC priced $398.7 million of notes this week in the manager’s first broadly syndicated CLO offering of the year.

In other new issuance, Granite Point Mortgage Trust Inc. priced a $825.04 million commercial real estate CLO deal in its second transaction since 2018.

The CLO had a weighted average interest rate at issuance of Libor plus 164 basis points.

In 2018, Granite Point Mortgage Trust priced the $826 million GPMT 2018-FL1, Ltd. deal with a weighted average interest rate of Libor plus 127 bps.

“After a slow start to the year, U.S. CLO issuance picked up slightly this week,” Wells Fargo Securities LLC senior analyst Dave Preston and associate analyst Mackenzie Miller said in a note on Friday.

As of Thursday, U.S. CLO issuance year to date totals $11 billion, including $5.9 billion of volume so far in February, according to the report.

“YTD issuance is only 7% below last year’s total, and February MTD issuance is actually 9% above last year,” the analysts said.

While issuance has improved, issuers are facing limited U.S. demand for AAA notes, which is leading to substantial AAA tiering of 15 bps to 25 bps, the analysts said.

CLO issuers have “shifted to shorter deals” with one-year non-call deals, according to the note.

Voya’s new CLO has an eight-month non-call period and a one-year reinvestment period.

In January, PGIM, Inc. priced a $428.79 CLO, the Dryden 75 CLO, Ltd./Dryden 75 CLO, LLC offering, with a five-month non-call period and a one-year reinvestment period.

In 2018, non-call periods typically ranged at two years, while reinvestment periods stretched from an average four to five years.

“It appears equity investors are trying to take advantage of the limited term curve to price tighter AAAs, with an eye toward refinancing in a year,” the Wells Fargo analysts said.

Elsewhere in the secondary market, supply was heavy this week but spreads were unchanged to slightly wider, according to the report.

“In the U.S., investors faced more than 40 Bids Wanted in Competition lists, totaling over $1 billion in the first four days of the week,” the analysts said, adding the median monthly BWIC volume since 2017 is $2 billion.

In other market data, outflows from leveraged loans were steady for the week ended Feb. 13 at $460 million, Yuri Seliger, a credit strategist with BofA Merrill Lynch, said in a report released on Friday.

The space had $470 million of redemptions in the previous week.

Voya brings new issue

Voya Alternative Asset Management priced $398.7 million of notes due April 15, 2029 in the new CLO deal, according to a market source.

Voya CLO 2019-1, Ltd./Voya CLO 2019-1 LLC sold $259 million of class A floating-rate notes at Libor plus 117 bps in the AAA-rated tranche.

Jefferies LLC was the placement agent.

The offering is collateralized mostly by broadly syndicated first-lien senior secured loans.

Voya priced four new CLO deals each year in 2017 and 2018.

The firm is an affiliate of New York City-based Voya Investment Management LLC.

Granite Point sells CRE CLO

Granite Point Mortgage Trust sold $825.04 million of notes due Feb. 21, 2036 in the GPMT 2019-FL2, Ltd. deal, according to a market source.

The CLO had a weighted average interest rate at issuance of Libor plus 164 bps.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC and Wells Fargo Securities, LLC were the placement agents.

The CLO will be managed by Granite Point Mortgage Trust affiliate GPMT Collateral Manager LLC.

The deal is collateralized by non-investment-grade commercial real estate loans.

The New York City-based firm originates, invests in and manages senior floating-rate commercial mortgage loans and other debt. The company is externally managed by Pine River Capital Management LP.

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