Oaktree brings $708 million three-part CLO; Sankaty, KKR, Angelo Gordon price; AAAs stable

By Cristal Cody

Tupelo, Miss., Aug. 18 – CLO managers including Oaktree Capital Management, LP tapped the market, while late-month primary activity is expected to wane, according to sources on Monday.

Oaktree Capital priced the AAA notes in the $708 million three-tranche Oaktree EIF II Series A1 Ltd./Oaktree EIF II Series A1 LLC deal at Libor plus 147 basis points.

MUFG was the placement agent.

The offering is the Los Angeles-based asset management firm’s first U.S. CLO deal since January.

Also in the primary market, Angelo, Gordon & Co., LP raised $617.8 million in the Northwoods Capital XII Ltd./Northwoods Capital XII LLC deal via Goldman Sachs & Co., according to a market source.

The CLO priced $376.2 million of notes in the AAA slice at Libor plus 150 bps.

The deal is the second offering this year from the New York City-based alternative investment manager.

KKR Financial Advisors II, LLC brought $518 million of notes in the KKR CLO 9 Ltd./KKR CLO 9 LLC transaction in the firm’s first U.S. deal in 2014.

The CLO placed the AAA-rated tranche at Libor plus 147 bps, a market source said.

Credit Suisse Securities (USA) LLC was the placement agent.

KKR Financial Advisors, a subsidiary of KKR Asset Management, LLC, priced two CLO transactions in 2013.

New issue CLO AAA notes continue to price in the range of Libor plus 140 bps to Libor plus 154 bps, according to market sources.

“Market volatility may be elevated for some time given the risks that seem to be simultaneously conspiring,” J.P. Morgan Securities LLC analysts said in a note. “CLO AAAs will continue to be fairly well anchored but B/BB/BBB will depend on HY. CLO subordinate total returns have until recently been stable.”

In other CLO issuance in the U.S. market, Sankaty Advisors LLC refinanced $350.75 million of notes in a vintage 2012 deal, according to a market source.

Sankaty priced the AAA notes in the Race Point VI CLO, Ltd. transaction at Libor plus 114 bps. The notes originally priced at Libor plus 130 bps in 2012.

Citigroup Global Markets Inc. was the refinancing agent.

The CLO is the second vintage deal Sankaty has refinanced in 2014. The Boston-based firm also refinanced the $362 million Race Point V CLO, Ltd. deal in February.

In the European primary market, details emerged on Chenavari Credit Partners LLP’s debut €308 million Toro European CLO 1 Ltd. transaction.

The CLO sold €173.5 million of class A secured floating-rate notes at Euribor plus 140 bps, according to a market source.

Deutsche Bank AG, London Branch arranged the deal.

Chenavari Credit Partners is a subsidiary of London-based Chenavari Financial Group Ltd.

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