CLO supply busy at year’s end; Carlyle, First Eagle price; First Eagle refinances 2016 CLO

By Cristal Cody

Tupelo, Miss., Dec. 23 – The dollar-denominated CLO primary market remains busy late in the year with new deal and refinancing volume.

First Eagle Investment Management brought a new issue broadly syndicated CLO offering and priced a $333.26 million refinancing and reset of a 2016 middle-market CLO in the past week.

In the broadly syndicated transaction, First Eagle Private Credit Advisors LLC priced $405.35 million of securities.

First Eagle Private Credit LLC sold $333,256,000 of notes in the middle-market reprint.

Also last week as previously reported, HalseyPoint Asset Management LLC priced $458.86 million of notes in its debut CLO transaction, HalseyPoint CLO I, Ltd./HalseyPoint CLO I, LLC, via J.P. Morgan Securities LLC.

In addition, Seix Investment Advisors LLC priced the previously reported $406.4 million Mountain View CLO XV, Ltd./Mountain View CLO XV, LLC offering. Goldman Sachs & Co. LLC was the structuring and placement agent.

In other new issuance in December, Carlyle CLO Management LLC sold $455.2 million of notes in the manager’s fourth new broadly syndicated CLO transaction of 2019.

Year to date, new issue broadly syndicated deal volume has reached $114 billion, while refinancing supply totals $43 billion, according to a BofA Global Research note released on Monday.

Meanwhile, CLO bonds are continuing to rally late in the year.

In the secondary market, U.S. CLO BWIC volume saw $709 million of bonds that were “racing to bid before year-end,” last week, up from $427 million of volume in the prior week, according to the BofA report.

Of the trading volume, 43% of the bids were concentrated in AAAs, while 19% were from BB-rated notes.

“Secondary spreads tightened across the stack except for AAs which remain unchanged,” BofA market analysts said in the report.

CLO AAA notes ended Friday at Libor plus 113 basis points on average, 3 bps tighter on the week.

B tranches headed out on Friday 25 bps tighter on the week at Libor plus 1,200 bps on average.

Year over year, AAA spreads have tightened 19 bps, AAs have firmed 30 bps, A-rated bonds have improved 45 bps, BBB tranches have come in 50 bps and BBs are 45 bps better on the year.

“Only in single-Bs did we see a widening of 200 [bps] compared to this time last year,” BofA analysts said.

First Eagle prices CLO

First Eagle Private Credit Advisors priced $405.35 million of securities due Jan. 20, 2033 in the new issue broadly syndicated CLO offering, First Eagle BSL CLO 2019-1 Ltd., according to market sources.

The CLO sold $301 million of class A loans at Libor plus 162 bps at the top of the capital stack.

JPMorgan was the placement agent.

First Eagle Private Credit Advisors, previously known as NewStar Capital LLC, will manage the CLO.

The securities are backed primarily by broadly syndicated senior secured corporate loans.

First Eagle Private Credit Advisors is part of New York City-based First Eagle Investment Management.

Carlyle taps market

Carlyle CLO Management sold $455.2 million of notes due Jan. 15, 2033 in the Carlyle US CLO 2019-4 Ltd./Carlyle US CLO 2019-4 LLC transaction, according to market sources.

The CLO placed $276.75 million of the class A-1a-1 floating-rate notes at Libor plus 133 bps.

JPMorgan was the placement agent.

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

The asset management firm is an affiliate of Washington, D.C.-based Carlyle Group.

First Eagle resets 2016 CLO

First Eagle Private Credit priced $333,256,000 of notes in the First Eagle Commercial Loan Funding 2016-1 LLC transaction, a refinancing and reset of the NewStar Commercial Loan Funding 2016-1 LLC vehicle, according to market sources.

The middle-market CLO sold $159.75 million of class A-1a-R floating-rate notes at Libor plus 169 bps, $20 million of 3.353% class A-1b-R fixed-rate notes and $16.5 million of class A-2-R floating-rate notes at Libor plus 205 bps.

The AAA tranches priced with a weighted average spread of Libor plus 172 bps.

Wells Fargo Securities, LLC was the refinancing placement agent.

First Eagle Private Credit, which changed its name from NewStar Financial, LLC, will manage the CLO.

The maturity on the refinanced notes was extended to Jan. 25, 2032 from the original maturity of Feb. 25, 2028.

In the original $348,006,000 transaction issued March 2, 2016, the CLO sold $176.5 million of the class A-1 senior secured floating-rate notes at Libor plus 230 bps and $20 million of 3.44% class A-2 senior secured fixed-rate notes.

The middle-market CLO is backed primarily by small and medium enterprise loans.

Boston-based First Eagle Private Credit is an investment management company.

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