AB Private Credit to reissue middle-market CLO; broadly syndicated CLOs stable

By Cristal Cody

Tupelo, Miss., May 3 – AB Private Credit Investors LLC plans to price new notes in a reissue of a vintage 2016 middle-market CLO transaction.

Meanwhile in the broadly syndicated CLO market, stable portfolio spreads and weak exposure, among other factors, supported an improvement in many portfolio metrics in the first quarter, Fitch Ratings said in a report on Friday.

“The average reported weighted average spread was 3.47% at the end of March, relatively unchanged from fourth-quarter 2018,” Fitch said of broadly syndicated CLOs under its surveillance in the first quarter.

“Average trigger levels were lower at the end of the quarter, resulting in fewer CLOs tripping the covenant,” according to the report. “The weighted average life failures were also down, and portfolio gains were logged.”

In other market activity, leveraged loan outflows moderated to $170 million for the week ended May 1 from $260 million in the previous week, according to a BofA Merrill Lynch research report released on Friday.

AB Private Credit eyed

AB Private Credit Investors plans to refinance notes from the vintage 2016 ABPCI Direct Lending Fund CLO Ltd./ABPCI Direct Lending Fund CLO LLC offering, according to a notice of proposed second supplemental indenture.

The Rule 144A and Regulation S deal includes class A-1 senior secured floating-rate notes (/AAA expected/), class A-2A senior secured floating-rate notes (/AA expected/), class A-2B senior secured fixed-rate notes (/AA expected/), class B secured deferrable floating-rate notes (/A expected/), class C secured deferrable floating-rate notes (/BBB- expected/) and subordinated notes.

The CLO co-issuers are ABPCI Direct Lending Fund CLO I First Static Subsidiary LLC and ABPCI Direct Lending Fund CLO I Second Static Subsidiary LLC.

Natixis Securities Americas LLC is the refinancing agent.

The CLO maturity will be extended to July 20, 2029 from the original Dec. 22, 2028 maturity.

In the original $351.3 million deal issued Dec. 22, 2016, the CLO sold $240.6 million of class A floating-rate notes at Libor plus 270 basis points, $22.8 million of class B deferrable floating-rate notes at Libor plus 592 bps and $87.9 million of subordinated notes.

Proceeds will be used to redeem the original notes on the May 23 refinancing date.

Middle-market lender AB Private Credit Investors is a subsidiary of New York-based AllianceBernstein LP.

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