Market focuses on oil and gas; THL prices $408.68 million; AXA brings $412.25 million CLO

By Cristal Cody

Tupelo, Miss., Dec. 19 – Demand for CLOs remains strong as the year winds down despite market volatility from the oil and gas sector with new issuance from AXA Investment Managers Inc. and THL Credit Advisors LLC, according to informed sources on Friday.

“With only a few trading sessions before the end of the year, we expect the market focus to remain on oil,” Barclays’ analysts said in a note. “If it rebounds, or even settles into a range at or near current levels, the recent decompression between loans and bonds would likely partially reverse.”

CLO AAA-rated notes were unchanged on the month at Libor plus 160 basis points in the secondary market, while BBBs have widened 10 bps from November, according to a Wells Fargo Securities, LLC report on Friday.

A-rated notes are ending the month 10 bps tighter.

“Hopes for a quiet year-end were somewhat dashed by the broad risk-off move,” Wells Fargo Securities senior analyst Dave Preston and associate analyst Jason McNeilis said in the note.

“In general, the CLO market appears to be avoiding any over-reaction, but spreads did have a wider bias, and tiering between deals increased,” the analysts said. “Despite volatility in the loan market, demand continues to remain strong for CLOs as we approach the end of the year.”

Compared to 2013, year-to-date CLO issuance through mid-December has increased $39.5 billion, according to Wells Fargo.

AXA raises $412.25 million

AXA Investment Managers priced $412.25 million of notes due Jan. 21, 2027 in its second U.S. CLO transaction, according to a market source.

Allegro CLO II Ltd./Allegro CLO II LLC sold $244.4 million of class A-1 floating-rate notes at Libor plus 160 bps at the top of the capital structure.

The CLO also priced $7.2 million of class E deferrable floating-rate note at Libor plus 675 bps at the bottom of the stack.

J.P. Morgan Securities LLC arranged the transaction.

AXA Investment Managers was last in the primary market in December 2013 with the $369.35 million Allegro CLO I Ltd./Allegro CLO I LLC transaction.

The asset management firm is a subsidiary of Paris-based AXA Group.

THL brings 2014-3 CLO

THL Credit Advisors priced $408.68 million of notes due Jan. 22, 2027 in the THL Credit Wind River 2014-3 CLO Ltd./THL Credit Wind River 2014-3 LLC deal, according to a market source.

The CLO sold $253 million of class A floating-rate notes at Libor plus 162 bps. Lower in the capital stack, the CLO priced $5 million of class F deferrable floating-rate notes at Libor plus 665 bps.

Deutsche Bank Securities Inc. arranged the offering.

THL Credit Advisors has priced three CLO transactions over the year, including the $642.85 million THL Credit Wind River 2014-2 CLO Ltd./THL Credit Wind River 2014-2 LLC deal on Aug. 7 and the $620.4 million THL Credit Wind River 2014-1 CLO Ltd./THL Credit Wind River 2014-1 CLO LLC offering on April 2.

The Boston-based firm brought two CLO transactions in 2013.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.