By Cristal Cody
Tupelo, Miss., Aug. 3 – Redding Ridge Asset Management, LLC priced and closed $700 million of notes in its first collateralized loan obligation offering, according to a market source and a company press release on Thursday.
The RR 1 Ltd. transaction was a refinancing and reset of the ALM X Ltd./ALM X LLC deal that was originally issued in January 2014 by Apollo Credit Management LLC.
The offering was expected to include $1.5 million of class A-X floating-rate notes (Aaa/AAA); $419 million of class A-1-R floating-rate notes (Aaa/AAA); $82 million of class A-2-R floating-rate notes (AA); $64 million of class B-R floating-rate notes (A); $34.5 million of class C-R floating-rate notes (BBB-); $33.5 million of class D-R floating-rate notes (BB-) and $66.25 million of subordinated notes. Final pricing terms were not immediately available.
Redding will manage the renamed and refinanced CLO.
J.P. Morgan Securities LLC was the underwriter.
The maturity on the reset CLO was extended to July 15, 2029 from the original Jan. 15, 2025 maturity.
The refinanced CLO has a two-year non-call period and a five-year reinvestment period.
The deal was structured to comply with risk retention requirements in the United States and Europe with Redding Ridge retaining a majority of the CLO’s equity, according to the release.
The CLO is backed by a portfolio of broadly syndicated loans.
Proceeds were used to redeem the original notes.
The original $710.8 million ALM X CLO priced $410 million of class A-1 senior secured floating-rate notes at Libor plus 147 bps; $90 million of class A-2 senior secured floating-rate notes at Libor plus 200 bps; $65 million of class B senior secured deferrable floating-rate notes at Libor plus 260 bps; $42 million of class C deferrable floating-rate notes at Libor plus 330 bps; $37 million of class D deferrable floating-rate notes at Libor plus 460 bps; $13 million of class E deferrable floating-rate notes at Libor plus 540 bps and $53.8 million of subordinated notes.
Redding Ridge was established in 2016 as a capitalized manager vehicle to address risk retention regulations in the global CLO market.
The company said it focuses on serving as collateral manager of U.S. and European CLO transactions and related warehouse facilities and as the holder of retention interests in certain U.S. and European CLOs.
The firm is a subsidiary of permanent capital vehicle Redding Ridge Holdings, LP, which has acquired equity investments from Apollo Global Management, LLC and entered into contracts with Apollo to access various resources.
| Issuer: | RR 1 Ltd.
|
| Amount: | $700 million refinancing
|
| Maturity: | July 15, 2029
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| Securities: | Floating-rate and subordinated notes
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| Structure: | Cash flow CLO
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| Refinancing agent: | J.P. Morgan Securities LLC
|
| Manager: | Redding Ridge Asset Management, LLC
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| Call feature: | Two years
|
| Pricing date: | July 20
|
| Settlement date: | Aug. 3
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