GSO/Blackstone reprices 2016 CLO; Oaktree refinances €332.7 million; refinancings light

By Cristal Cody

Tupelo, Miss., May 28 – Two CLO managers priced dollar- and euro-denominated refinancings of vintage 2016 CLO transactions in May.

GSO/Blackstone Debt Funds Management LLC sold $588.8 million of notes in a refinancing of the Westcott Park CLO Ltd./Westcott Park CLO LLC deal originally issued June 30, 2016.

Oaktree Capital Management (UK) LLP refinanced €332.7 million from the Arbour CLO IV DAC transaction first priced on Sept. 30, 2016.

Moody’s Investors Service said in a May CLO report released on Friday that the lower pace of refinancings and resets was among the topics in focus among CLO market participants at its CLO and leveraged loan roundtable held in New York.

“Resets and refinancings have been much less prevalent than last year,” Moody’s said. “Many CLOs that had intended to reset late last year have instead chosen a less costly simple refinancing or continue to wait because CLO liability spreads remain uneconomical to reset.”

Moody’s said the majority of CLOs it has rated in 2019 have been new deals as opposed to resets and refinancings.

“Despite the decline in resets, Moody's view is that resets will remain part of the CLO market, but unless spreads come in, reset volume will remain muted in 2019,” the agency said.

Year to date, more than $13 billion of vintage dollar-denominated CLOs have been refinanced, while about €2 billion of euro-denominated CLOs have repriced this year, according to market sources.

GSO/Blackstone refinances

GSO/Blackstone Debt Funds Management sold $588.8 million of notes due July 20, 2028 in a refinancing of a 2016 vintage CLO transaction, according to a market source and a notice of proposed supplemental indenture and notice of optional redemption by refinancing.

Westcott Park CLO priced $413.44 million of class A-R senior secured floating-rate notes at Libor plus 121 basis points in the AAA-rated tranche.

Wells Fargo Securities, LLC was the refinancing placement agent.

The original $650.13 million CLO transaction was issued June 30, 2016. In that offering, the CLO priced $413.44 million of the class A senior secured floating-rate notes at Libor plus 153 bps.

Proceeds will be used to redeem the original notes.

The deal is backed primarily by broadly syndicated first-lien senior secured corporate loans.

GSO/Blackstone is a New York City-based subsidiary of alternative asset manager GSO Capital Partners LP.

Oaktree reprices Arbour CLO

Oaktree Capital Management (UK) priced €332.7 million of notes due Jan. 15, 2030 in a refinancing of the Arbour CLO IV transaction, according to a market source and notices to noteholders.

The CLO sold €30 million of 1.25% class A-1 senior secured fixed-rate notes (Aaa//AAA) and €214 million of class A-2 senior secured floating-rate notes (Aaa//AAA) at Euribor plus 87 bps at the top of the capital stack.

BNP Paribas Securities Corp. was the refinancing placement agent.

The original transaction issued Nov. 11, 2016 included €30 million of 1.29% class A-1 senior secured fixed-rate notes and €214 million of class A-2 senior secured floating-rate notes priced at Euribor plus 114 bps.

Proceeds will be used to redeem the outstanding class A-1, A-2, B, C and D notes. The original class E, F and subordinated notes will remain outstanding.

The CLO is collateralized primarily by senior secured loans.

The London-based firm is an affiliate of Los Angeles-based Oaktree Capital Management, LP.

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