325 Fillmore refinances $534.5 million; Barings refinances 2015-I, 2015-II CLOs

By Cristal Cody

Tupelo, Miss., Oct. 23 – New issue and refinancing action in the U.S. CLO market remains steady in October.

325 Fillmore LLC sold $534.5 million of notes due in a refinancing and reset of a 2014 CLO.

In new issuance, GoldenTree Loan Management LP priced the GoldenTree Loan Management US CLO 2 Ltd./GoldenTree Loan Management US CLO 2 Inc. offering, a source said. Final pricing details were not immediately available.

Euro-denominated refinancing action also has been busier in October.

Barings (UK) Ltd. refinanced two vintage 2015 deals.

More than €20 billion of euro-denominated CLOs have been refinanced year to date, according to market sources.

Nearly $90 billion of new issue CLOs have priced, while about $140 billion of vintage CLOs have been refinanced year to date, according to a BofA Merrill Lynch research note released on Monday.

New U.S. issue volume has been “volume robust and secondary market activity fairly light,” BofA Merrill Lynch analysts said in the note.

Primary and secondary spreads tightened over the past week. Mezzanine bonds firmed 25 basis points to 30 bps in secondary trading, the analysts said.

“Given supportive fundamentals and technical for CLOs, we see further tightening potential in the lower part of the capital stack heading into year-end,” the analysts said. “Spreads for senior paper should remain more stubborn around current levels given the prominence of foreign buyers with stricter yield requirements.”

CLO AAA spreads ended on Friday unchanged on the week at Libor plus 110 bps.

A-rated spreads were 35 bps tighter on the week at Libor plus 200 bps on Friday, while BBB, BB and B tranches firmed 25 bps on the week, according to the note.

325 Fillmore refinances

325 Fillmore sold $534.5 million of notes due in a refinancing of the Elevation CLO 2014-2, Ltd. deal, according to a market source and a notice of executed second supplemental indenture on Friday.

Elevation CLO 2014-2 priced $320 million of class A-1L-R senior secured floating-rate notes at Libor plus 123 bps.

MUFG was the refinancing placement agent.

The maturity on the notes was extended to Oct. 15, 2029 from the original March 2026 maturity.

325 Fillmore has priced two new CLOs and refinanced one vintage CLO year to date.

The CLO manager is an affiliate of Denver-based ArrowMark Colorado Holdings LLC.

Barings refinances euro CLOs

Barings (UK) sold €298.8 million of notes due Oct. 25, 2029 in a refinancing of a 2015 euro-denominated CLO deal, according to a market source.

Babson Euro CLO 2015-1 BV priced €206.7 million of the class A-1R senior secured floating-rate notes at Euribor plus 82 bps.

Goldman Sachs International arranged the deal.

Barings (UK) also sold €472.25 million of notes in a refinancing and reset of the Barings CLO Ltd. 2015-II transaction, according to market sources.

Babson Euro CLO 2015-II priced €320 million of class A-R senior secured floating-rate notes at Euribor plus 119 bps.

BofA Merrill Lynch arranged the deal.

The maturity on the notes was extended to Oct. 20, 2030 from the original July 20, 2027 due date.

Barings is a London-based credit fund management firm.

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