By Cristal Cody
Tupelo, Miss., Nov. 6 – Covenant Credit Partners LLC priced $525 million of notes due Oct. 19, 2026 in the firm’s second collateralized loan obligation transaction, according to a market source.
Covenant Credit Partners CLO II Ltd./Covenant Credit Partners CLO II LLC sold $4 million of class X floating-rate notes (//AAA) at Libor plus 100 basis points; $315 million of class A floating-rate notes (//AAA) at Libor plus 149 bps; $56 million of class B floating-rate notes at Libor plus 220 bps; $36 million of class C floating-rate notes at Libor plus 265 bps; $28 million of class D floating-rate notes at Libor plus 365 bps; $25 million of class E floating-rate notes at Libor plus 520 bps; $10 million of class F floating-rate notes at Libor plus 575 bps and $51 million of subordinated notes.
Morgan Stanley & Co. LLC arranged the deal.
Covenant Credit Partners will manage the CLO.
The CLO has a two-year non-call period and a four-year reinvestment period.
The offering is backed primarily by first-lien senior secured loans.
Proceeds will be used to purchase a portfolio of about $500 million of leveraged loans.
Covenant Credit Partners brought the $527.5 million debut Covenant Credit Partners CLO I Ltd./Covenant Credit Partners CLO I LLC deal on June 18.
The alternative credit investment management firm is based in Charlotte, N.C.
| Issuer: | Covenant Credit Partners CLO II Ltd./Covenant Credit Partners CLO II LLC
|
| Amount: | $525 million
|
| Maturity: | Oct. 19, 2026
|
| Securities: | Floating-rate and subordinated notes
|
| Structure: | Cash flow CLO
|
| Placement agent: | Morgan Stanley & Co. LLC
|
| Manager: | Covenant Credit Partners LLC
|
| Call feature: | 2016
|
| Settlement date: | Nov. 12
|
| Distribution: | Rule 144A
|
|
|
| Class X notes
|
| Amount: | $4 million
|
| Securities: | Floating-rate notes
|
| Coupon: | Libor plus 100 bps
|
| Rating: | Fitch: AAA
|
|
|
| Class A notes
|
| Amount: | $315 million
|
| Securities: | Floating-rate notes
|
| Coupon: | Libor plus 149 bps
|
| Rating: | Fitch: AAA
|
|
|
| Class B notes
|
| Amount: | $56 million
|
| Securities: | Floating-rate notes
|
| Coupon: | Libor plus 220 bps
|
| Rating: | None
|
|
|
| Class C notes
|
| Amount: | $36 million
|
| Securities: | Floating-rate notes
|
| Coupon: | Libor plus 265 bps
|
| Rating: | None
|
|
|
| Class D notes
|
| Amount: | $28 million
|
| Securities: | Floating-rate notes
|
| Coupon: | Libor plus 365 bps
|
| Rating: | None
|
|
|
| Class E notes
|
| Amount: | $25 million
|
| Securities: | Floating-rate notes
|
| Coupon: | Libor plus 520 bps
|
| Rating: | None
|
|
|
| Class F notes
|
| Amount: | $10 million
|
| Securities: | Floating-rate notes
|
| Coupon: | Libor plus 575 bps
|
| Rating: | None
|
|
|
| Equity tranche
|
| Amount: | $51 million
|
| Securities: | Subordinated notes
|
| Rating: | Non-rated
|
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