KKR Financial Advisors wraps $711.3 million CLO; securitized secondary market active

By Cristal Cody

Eureka Springs, Ark., Dec. 15 – KKR Financial Advisors II, LLC completed a $711.3 million CLO offering, the firm’s third new CLO deal of 2016.

Primary and refinancing action is expected to stay active through the upcoming week, one source reports.

U.S. risk retention regulations that require CLO managers to retain a 5% equity stake in a CLO transaction take effect on Dec. 24.

The securitized secondary market continues to see action this week.

On Wednesday, $204.89 million of high-grade CBO/CDO/CLO issues and $130.3 million of non-investment-grade issues were traded, according to Trace.

During Tuesday’s session, $184.2 million of investment-grade securities and $1.71 billion of non-investment-grade issues traded.

Trading volume for high-grade CBO/CDO/CLO issues totaled $146.76 million on Monday, while non-investment-grade securitized secondary trading volume came in at $125.5 million.

KKR Financial Advisors II closed on its $711.3 million offering of notes due Jan. 20, 2029 in the KKR CLO 16 Ltd./KKR CLO 16 LLC transaction on Thursday, according to a market source.

The CLO sold $455 million of class A-1 senior secured floating-rate notes at Libor plus 149 basis points in the senior tranche.

Citigroup Global Markets Inc. was the placement agent.

The deal is collateralized primarily by broadly syndicated first-lien senior secured loans.

The investment firm, an affiliate of Kohlberg Kravis Roberts & Co. LP, placed three new CLO transactions in 2015.

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