CLO issuance ahead of 2014; Columbia Management, Greywolf, WhiteHorse, Fortress price

By Cristal Cody

Tupelo, Miss., March 23 – Year-to-date U.S. CLO issuance jumped to about $25 billion following a rush of new deals, according to market sources on Monday.

The CLO “primary keeps printing,” J.P. Morgan Securities LLC analysts said in a market note. “The US pace is stronger than 14Q1’s $23.9 billion but less than $29 billion in 13Q1.”

CLO managers including Greywolf Capital Management LP, Columbia Management Investment Advisors LP, H.I.G. WhiteHorse Capital, LLC and Fortress Investment Group LLC tapped the market, sources said.

In other CLO market activity, NewStar Financial Inc. announced it closed on its previously reported $496.1 million CLO transaction, NewStar Commercial Loan Funding 2015-1 LLC.

NewStar Financial priced five tranches of floating-rate notes due April 20, 2027 in the Rule 144A-eligible private placement offering on March 11.

All notes were priced at par to yield an initial weighted average of about Libor plus 240 basis points, the company said.

The deal was upsized from $400 million.

Wells Fargo Securities, LLC was the placement agent.

NewStar said the CLO offering was structured to satisfy European risk retention rules and included a small Aaa/AAA-rated step-up tranche to meet specific investor demand.

NewStar retained the $85.8 million equity tranche of membership interests.

The notes were backed by a diversified portfolio of commercial loans originated by NewStar.

The CLO has a two-year non-call period and a 4.1-year reinvestment period.

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