Golub plans $408.92 million reissue of 2015 CLO; secondary market activity moderate

By Cristal Cody

Tupelo, Miss., March 22 – CLO refinancing activity is picking up with more expected after April if no appeals are filed against the U.S. Court of Appeals for the District of Columbia’s ruling earlier in February regarding regulation of the market.

Golub Capital intends to refinance $408.92 million from a 2015 CLO in the firm’s first reported refinancing of the year.

More than $25 billion of vintage CLOs have been refinanced year to date, sources report.

The court’s ruling removes the risk retention requirement that CLO managers retain 5% of a CLO deal.

About $100 billion of refinancing volume is predicted by market sources for the year, along with about €24 billion of euro-denominated CLO refinancing issuance.

In other activity, secondary market volume was more moderate on Wednesday with $117.63 million of investment-grade issues and $96.28 million of non-investment-grade securities traded, according to Trace data.

Trading was heavy on Tuesday in high-grade CDO/CBO/CLO issues with $322 million of secondary market volume. Also, $77.11 million of lower-rated securities were traded during the session.

On Monday, trading volume included $93.3 million of investment-grade issues and $48.57 million of non-high-grade CBO/CDO/CLO securities.

Golub offers 26(B)-R CLO

Golub Capital plans to price $408.92 million of notes in a refinancing and reset of the Golub Capital Partners CLO 26(B)-R Ltd./Golub Capital Partners CLO 26(B)-R LLC transaction, according to a market source.

The deal is expected to include $236 million of class A-1-R floating-rate notes (//AAA); $20 million of class A-2-R floating-rate notes; $42 million of class B-R floating-rate notes; $21.25 million of class C-R floating-rate notes; $26.25 million of class D-R floating-rate notes; $22.5 million of class E-R floating-rate notes and $40.92 million of subordinated notes.

Wells Fargo Securities LLC is the refinancing placement agent.

Golub affiliate OPAL BSL LLC will resume the management of the broadly syndicated CLO from company affiliate GC Investment Management LLC, which priced a middle-market CLO earlier in the year.

The maturity on the notes will be extended to April 20, 2031 from the original Nov. 5, 2027 maturity.

The original $407.55 million transaction was issued Nov. 5, 2015.

Proceeds will be used to redeem the original notes on April 10.

In 2017, Golub Capital priced two new CLOs.

GC Investment Management is a Chicago-based affiliate of middle market lender Golub Capital.

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