CLO pipeline fills; Octagon offers $605 million; Crestline Denali markets $360.5 million

By Cristal Cody

Eureka Springs, Ark., Aug. 31 – Two CLO managers plan to return to the primary market soon to price new deals.

Octagon Credit Investors, LLC is in the deal pipeline with $605 million of notes in the firm’s third CLO transaction of 2016.

Crestline Denali Capital, LP is offering $360,575,000 of notes in its second CLO deal of the year.

Year to date, nearly $40 billion of CLOs have priced in the U.S. dollar-denominated primary market, according to Prospect News data.

Octagon markets $605 million

Octagon Credit Investors plans to price $605 million of notes due 2027 in the deal via Morgan Stanley & Co. LLC, according to a market source.

The Octagon Investment Partners 28, Ltd./Octagon Investment Partners 28, LLC deal includes $372 million of class A senior secured floating-rate notes (Aaa); $66 million of class B-1 senior secured floating-rate notes (Aa1); $18 million of class B-2 senior secured fixed-rate notes (Aa1); $42 million of class C secured deferrable mezzanine floating-rate notes (A2); $30 million of class D secured deferrable mezzanine floating-rate notes (Baa3); $12 million of class E-1 secured deferrable junior floating-rate notes (Ba3); $12 million of class E-2 secured deferrable junior floating-rate notes (Ba3) and $53 million of subordinated notes.

The deal has a two-year non-call period and a five-year reinvestment period.

The CLO is backed primarily by broadly syndicated first-lien senior secured loans.

Octagon Credit Investors has priced two CLOs year to date.

The New York-based credit investment firm priced three CLO transactions in 2015.

Crestline Denali on tap

Crestline Denali Capital plans to price $360,575,000 of notes due Oct. 23, 2028 in the transaction, according to a market source.

The Crestline Denali CLO XIV, Ltd./Crestline Denali CLO XIV LLC transaction includes $222.25 million of class A floating-rate notes (//AAA); $42,875,000 of class B floating-rate notes; $20.35 million of class C floating-rate notes; $19 million of class D floating-rate notes; $17.5 million of class E floating-rate notes and $38.6 million of subordinated notes.

BNP Paribas Securities Corp. is the placement agent.

The CLO is backed entirely by first-lien senior secured loans and will have a two-year non-call period and a four-year reinvestment period.

Proceeds from the deal will be used to purchase a portfolio of about $350 million of primarily first-lien senior secured leveraged loans.

Crestline Denali previously priced the $358.84 Denali Capital CLO XII, Ltd./Denali Capital CLO XII LLC transaction on Feb. 25.

The asset management firm is based in Oak Brook, Ill.

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