Barings 2019-I, BlueMountain CLO V and Dryden 73 price new paper; three CLOs refinance

Chicago, Oct. 28 – Monday was active in the collateralized loan obligation market with one new domestic issue, one European deal and four CLOs refinancing vintage paper.

Barings LLC priced its first transaction of 2019 with a middle-market $401.25 million portfolio from issuer Barings Middle Market CLO Ltd. 2019-I.

In the euro market, €358.3 million of new paper came from BlueMountain Fuji EUR CLO V DAC.

Also coming in a euro-denominated transaction, PGIM Ltd. priced €411.75 million of Dryden 73 Euro CLO 2018 BV notes.

Carlyle Global Market Strategies CLO 2016-3, Ltd. is refinancing its entire portfolio for $506.11 million on Nov. 5.

In partial dollar refinancings, Apex Credit CLO 2016 Ltd./Apex Credit CLO 2016 LLC is replacing three classes of notes with new paper for $242 million, and ICG US CLO 2017-1, Ltd. sold $256 million of class A notes.

Barings prices new paper

The Barings portfolio contained some variations from the typical CLO pattern in its classes.

First, typically there is a rise in the interest rate between the first class of notes and the second class of notes.

In this transaction, the interest rate dipped to Libor plus 140 basis points from Libor plus 175 bps, with the caveat that the lower interest rate on the second class of notes comes with a Libor floor of 200 bps.

Additionally, the third class is debt that will be issued in loan form, the A-1L class.

The weighted average spread on the portfolio is 5.11%, excluding the Libor floor.

The industries favored by the CLO manager are software and air freight and logistics.

The manager currently manages two CLOs and has $1.2 billion in related CLO assets under management.

BlueMountain sells euro CLO

In BlueMountain’s new euro transaction, the CLO is given a weighted average spread of 3.7% in Fitch Ratings’ presale report.

A maximum of 7.5% of the portfolio can be rated triple-C by Fitch and a maximum of 30% of the loans can be covenant-lite.

Fitch gives the cash flow CLO a weighted average rating factor (WARF) of 32.1, “below the indicative WARF covenant of 33.5.”

The portfolio has a 4.6-year reinvestment period and a maximum weighted average life of 8.5 years.

Citigroup Global Markets is the arranger.

Dryden sells CLO

Managed by PGIM, Dryden 73 priced a new portfolio with eight classes of notes.

Fitch’s WARF score for the portfolio is 32.55.

The CLO which matures on Jan. 15, 2033 will have a weighted average life of 8.5 years and a reinvestment period of 4.5 years.

The CLO is being arranged by Citigroup Global Markets.

Carlyle refinances

Carlyle is resetting its entire 2016-3 portfolio in a $506.11 refinancing.

The deal’s WARF is 2976 on the Moody’s Investors Service rating scale, significantly above average in the 90th percentile.

Its weighted average spread of 3.72% was also in the 90th percentile.

However, its Caa percentage of 5.4% was also in the 90th percentile, meaning the transaction has “greater exposure to high credit risk assets,” according to Moody’s.

The CLO, underwritten by Mizuho Securities USA LLC, is expected to close in November.

Apex, ICG also refinance

Apex Credit CLO 2016 Ltd./Apex Credit CLO 2016 LLC and ICG US CLO 2017-1, Ltd. are partially refinancing some of their notes.

Apex is refinancing its class A-S-R and class B-F-R notes in three new classes of notes in a redemption-by-refinancing deal.

IGC, in a one-class transaction, will redeem its current notes with the proceeds from new class A-R notes. The CLO has reduced the spread on its floating-rate notes to Libor plus 135 bps from Libor plus 188 bps.

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