GSO prices $573.79 million middle-market CLO; Triumph reprices; volume outpaces 2018

By Cristal Cody

Tupelo, Miss., April 26 – In new CLO issuance, GSO Capital Partners, LP priced $573.79 million of notes in a middle-market offering that closed on Friday.

In the refinancing space, Triumph Capital Advisors, LLC priced $350 million of notes in a reprint of a 2016 broadly syndicated CLO.

April has seen $13 billion of new CLO issuance, according to a Wells Fargo Securities, LLC analysts’ note on Friday.

“U.S. CLO issuance continues its robust pace in April, with $42 billion priced year to date,” Wells Fargo analysts said in the note. “YTD 2019 issuance is now 5% higher than 2018 YTD volume. On a deal count basis, YTD 2019 U.S. CLO issuance is 18% higher than 2018 YTD volume, as the average deal size has decreased.”

Fitch Ratings said in a report on Friday that there were no U.S. CLO transactions greater than $1 billion priced in the first quarter of 2019.

“Last year, for BSL CLOs there was at least one such CLO pricing in the first, second and fourth quarters, or seven total during the year,” Fitch said. “The median BSL CLO deal size ranged $505 million to $511 million for each quarter in 2018, in line with $504 million in first-quarter 2019. The last time there was a period without any CLO transactions totaling $1 billion or greater was in 2016.”

So far, one deal sized greater than $1 billion has priced in the second quarter, according to market sources.

Elmwood Asset Management LLC priced $1,003,200,000 of notes in the Elmwood CLO II Ltd. offering on April 5. The transaction closes May 10.

CLO supply is expected to slow in the first half of May, the Wells Fargo analysts said.

In other action, leveraged loans continued to see outflows but at a slower pace of $260 million in the week ended April 24, down from $530 million in the prior week, according to a BofA Merrill Lynch research note released on Friday.

GSO Capital in primary

GSO Capital Partners priced $573.79 million of notes due April 25, 2029 in the Diamond CLO 2019-1, Ltd./Diamond CLO 2019-1, LLC middle-market CLO transaction that closed on Friday, according to market sources.

The CLO sold $319,125,000 of class A-1 floating-rate notes at Libor plus 160 basis points and $37,375,000 of class A-2 floating-rate notes at Libor plus 185 bps.

Wells Fargo Securities LLC was the placement agent.

The notes are backed by middle-market senior secured term loans.

The deal is GSO Capital’s second middle-market CLO transaction after pricing one middle-market deal in 2018.

GSO Capital Partners is a subsidiary of the Blackstone Group LP.

Triumph reprices CLO V

Triumph Capital Advisors priced $350 million of notes due Oct. 25, 2028 in a refinancing of a 2016 CLO deal, according to a notice of executed supplemental indenture on Thursday.

In the senior tranche, Trinitas CLO V Ltd./Trinitas CLO V LLC sold $256 million of class A-R floating-rate notes (Aaa/AAA) at Libor plus 139 bps.

Natixis Securities Americas LLC was the refinancing placement agent.

In the original $409 million Trinitas CLO V deal issued Sept. 22, 2016, the CLO priced $256 million of the class A floating-rate notes at Libor plus 170 bps.

Proceeds were used to redeem the original notes.

The CLO manager is a subsidiary of Dallas-based Triumph Bancorp, Inc.

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