Cerberus prices $432.1 million middle-market CLO; Sculptor refinances; secondary active

By Cristal Cody

Tupelo, Miss., Oct. 1 – Cerberus Capital Management, LP priced $432.1 million of notes in the manager’s first middle-market CLO offering of the year.

Meanwhile, Sculptor Loan Management LP priced $20 million of notes in two parts in a refinancing of a fixed-rate tranche from a 2017 broadly syndicated CLO transaction.

About $6 billion of middle-market CLOs have priced year to date, while more than $28 billion of vintage CLOs have been refinanced, according to market sources.

New issue broadly syndicated CLO supply totals about $55 billion year to date.

Primary action picked up in September with more than $11 billion of issuance following a light August, while year-to-date supply is down about 33%, according to a Wells Fargo Securities, LLC note on Thursday.

“September U.S. CLO primary volume was the most active month since April 2019,” Wells Fargo Securities analysts said in the report. “September was a marked change from August, which posted the lowest monthly volume figure since January 2017 (excluding March/April 2020).”

Meanwhile, the securitized secondary market saw lighter trading volume over the month.

“September posted the lowest monthly CLO secondary volume of the year, at $11.9 billion,” the Wells Fargo analysts said. “However, in an indication of how much secondary activity has increased this year, September’s secondary volume was higher than any single month from 2015 to 2019.”

Cerberus in primary

Cerberus Capital Management priced $432.1 million of notes due Oct. 15, 2031 in the middle-market CLO, sources report.

Cerberus Loan Funding XXVIII LP sold $223.6 million of class A senior secured floating-rate notes at Libor plus 185 basis points in the AAA-rated tranche.

Natixis Securities Americas LLC was the placement agent.

Cerberus Business Finance, LLC will manage the CLO.

The CLO is collateralized by small and medium-sized enterprise loans and other assets.

Cerberus priced two middle-market CLO deals in 2019.

The private equity firm is based in New York.

Sculptor prices

Sculptor Loan Management priced $20 million of notes due July 22, 2030 in two tranches in the refinancing, according to market sources.

OZLM XVII, Ltd./OZLM XVII, LLC sold $6,315,789 of 2.38% class A-2b-a-R senior secured fixed-rate notes (expected rating Aa2) and $13,684,211 of class A-2b-b-R senior secured floating-rate notes (expected rating Aa2) at Libor plus 205 bps.

In the original $512 million transaction issued Aug. 3, 2017, the CLO sold $20 million of 3.75% class A-2b senior secured fixed-rate notes.

Goldman Sachs & Co. LLC was the refinancing agent.

The CLO is collateralized primarily by broadly syndicated first-lien senior secured corporate loans.

The New York-based firm is part of Sculptor Capital Management, Inc.

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