Primary brisk; Sankaty prices €361.4 million CLO; Atrium XI, Cedar Funding IV terms emerge

By Rebecca Melvin

New York, Sept. 17 – The CLO primary market, which has heated up in the last week or so, remained brisk on Wednesday, while the secondary market, which saw seven to 10 bid-wanted-in-competition lists in the session, was also active and deemed strong.

In the primary market, Sankaty Advisors LLC priced an upsized €361.4 million of euro-denominated notes in a collateralized loan obligation transaction, according to a market source. The deal was upsized from €310 million.

The Sankaty pricing was seen in line with market trends, a New York-based trader said.

Terms also emerged on the Cedar Funding IV CLO Ltd./Cedar Funding IV CLO LLC deal for $460.85 million and Atrium XI/Atrium XI LLC’s deal for $1.02 billion of notes due October 2025.

“All the dealers are printing deals, not at the tightest levels that they’ve been all year, but they are printing,” the trader said.

In the secondary market, BWIC lists have been strong this week after a lull for the first week and a half after Labor Day, the trader said.

“People were getting back and waiting to feel out the market, with everyone lighter at the end of the summer,” he said.

Pricing has been firming up gradually this month, with shorter-duration issues firmest across all tranches, and a bit weaker in the longer-dated issues.

“Everything from AAA to equity is firmer in the shorter stuff,” the trader said.

“The longest is the most varied and based on perceived liquidity and perceived value,” the trader said.

Back in the primary market on Wednesday, Sankaty’s deal included €206.75 million of class A-1 floating-rate notes priced at Libor plus 130 basis points and €5 million of class A-2 fixed-rate notes at 1.8% at the top of the capital structure.

The issue also included; €6 million of class B-1 floating-rate notes at Libor plus 200 bps; €29 million of 2.85% class B-2 fixed-rate notes; €22.75 million of class C floating-rate notes at Libor plus 260 bps; €20.1 million of class D floating-rate notes at Libor plus 340 bps; €22.8 million of class E floating-rate notes at Libor plus 580 bps; €11 million of class F notes at Libor plus 700 bps; and €38 million of non-rated subordinated notes.

Cedar Funding IV’s CLO deal included $224 million of class A-1 floating-rate notes (/AAA/) priced at Libor plus 150 bps and $62 million of class A-F fixed-rate notes (/AAA/) at 3.55%.

The CLO also included $31 million of class B-1 floating-rate notes (/AA/) at Libor plus 225 bps; $32 million of 4.7% class B-F fixed-rate notes (/AA/); $28.5 million of class C deferrable floating-rate notes (/A/) at Libor plus 300 bps; $23 million of class D deferrable floating-rate notes (/BBB/) at Libor plus 415 bps; $17 million of class E deferrable floating-rate notes (/BB/) at Libor plus 625 bps; and $43.35 million of non-rated subordinated notes.

Atrium XI’s deal included an $88.25 million equity tranche, as well as a $602.25 million tranche of class A-1 senior secured floating-rate notes (/AAA/) at Libor plus 144 bps and $10 million of class A-2 fixed-rate notes at 3.8%.

The CLO also included $118.5 million of class B notes (/AA/) at Libor plus 215 bps; $81 million of class C floating-rate deferrable notes at Libor plus 320 bps; $52 million of class D floating-rate deferrable notes at Libor plus 390 bps; $59.25 million of class E floating-rate deferrable notes at Libor plus 510 bps; and $11 million of class F floating-rate deferrable notes at Libor plus 605 bps.

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