Octagon refinances $562.5 million CLO, firms AAAs by nearly 60 bps; secondary thins

By Cristal Cody

Tupelo, Miss., May 2 – Octagon Credit Investors, LLC refinanced $562.5 million of notes from a vintage 2015 CLO deal following two new issues from the CLO manager this year.

The coupon on the AAA-rated tranche tightened by nearly 60 basis points in the refinancing.

CLO refinancing volume continues to outpace new issuance with more than $46 billion of refinanced CLOs year to date, according to market sources. More than $35 billion of new CLOs have priced through April.

In other activity, securitized secondary trading has been light this week, according to Trace data.

Octagon Credit Investors priced $562.5 million of notes due July 15, 2027 in a refinancing of the Octagon Investment Partners XXIII, Ltd./Octagon Investment Partners XXIII, LLC transaction, according to a notice of executed supplemental indenture on Tuesday.

The CLO sold $390 million of class A-1-R senior secured floating-rate notes at Libor plus 85 bps in the senior tranche.

Morgan Stanley & Co. LLC arranged the offering.

In the original $608.97 million transaction issued July 15, 2015, the CLO sold $193.8 million of class A-1 floating-rate notes Libor plus 142 bps and $193.8 million of class A-2 floating-rate notes at Libor plus 142 bps.

Octagon Credit Investors has priced two new CLOs and refinanced a vintage CLO year to date.

The New York-based credit investment firm is a subsidiary of Conning & Co.

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