Pipeline 'growing'; Kingsland brings $367.7 million CLO; American Capital closes deal

By Cristal Cody

Tupelo, Miss., Sept. 25 - New CLO issuance is on the way as the month winds down, according to market sources on Wednesday.

"The pipeline is definitely growing," one syndicate source said. "A lot of deals have priced since the first of September."

CLO spreads on average are "flat to slightly tighter" over the week, the source said.

Kingsland Capital Management, LLC priced a $367.7 million CLO with spreads that ranged from Libor plus 100 basis points for the AAA-rated slice to Libor plus 575 bps for the B-rated tranche, according to market sources.

American Capital, Ltd. said on Wednesday that it closed on its $414.2 million CLO offering sold in August with spreads that ranged from Libor plus 135 bps for the $99 million slice of class A-1a notes to Libor plus 575 bps for the $7 million tranche of class E notes.

Kingsland prices $367.7 million

Kingsland Capital Management brought $367.7 million of notes and loans due Oct. 28, 2024 in the CLO that is expected to close on Thursday, according to market sources.

Kingsland VI/Kingsland VI LLC sold $2 million of class X floating-rate notes (Aaa/AAA/) at Libor plus 100 bps; $50 million of class A loans (Aaa/AAA/), which are convertible into class A-2 notes, at Libor plus 123 bps and $170 million of class A-1 senior secured floating-rate notes (Aaa/AAA/) at Libor plus 125 bps.

Also sold were $44 million of class B senior secured floating-rate notes (/BB/) at Libor plus 190 bps; $25 million of class C mezzanine secured deferrable floating-rate notes (/A/) at Libor plus 340 bps; $19 million of class D mezzanine secured deferrable floating-rate notes (/BBB/) at Libor plus 365 bps; $15 million of class E junior secured deferrable floating-rate notes (/BB/) at Libor plus 500 bps; $8 million of class F junior secured deferrable floating-rate notes (/B/) at Libor plus 575 bps and $34.7 million of subordinated notes.

GreensLedge Capital Markets LLC arranged the deal.

Kingsland Capital Management is a New York-based investment firm that manages five CLOs and has more than $2 billion of assets under management.

American Capital closes

ACAS CLO 2013-2, Ltd. sold 10 tranches of bonds due Oct. 25, 2025 via Citigroup Global Markets Inc. in the deal that closed on Wednesday, as previously reported.

"American Capital now has four CLOs under management, totaling $1.5 billion in total assets," Mark Pelletier, managing director of American Capital's leveraged finance group, said in a statement on Wednesday.

American Capital was in the market earlier in the year with the $414 million ACAS CLO 2013-1, Ltd./ACAS CLO 2013-1, LLC transaction in March.

Tom McHale, American Capital senior vice president of finance, said in the release that the company views "CLO issuance as an integral part of our continued growth as an asset manager."

ACAS CLO 2013-2 priced $99 million of class A-1a senior secured floating-rate notes (Aaa/AAA/) at Libor plus 135 bps; $140 million of class A-1b senior secured floating-rate notes (Aaa/AAA) at Libor plus 110 bps; and $10 million of 3.559% class A-1c senior secured fixed-rate notes (Aaa/AAA/); $43.75 million of class A-2a senior secured floating-rate notes (/AA/) at Libor plus 175 bps; $10 million of 4.55% class A-2b senior secured fixed-rate notes (/AA/); $28 million of class B senior secured deferrable floating-rate notes (/A/) at Libor plus 265 bps; $20 million of class C senior secured deferrable floating-rate notes (/BBB/) at Libor plus 325 bps; $18 million of class D senior secured deferrable floating-rate notes (/BB/) at Libor plus 450 bps and $7 million of class E senior secured deferrable floating-rate notes (/B/) at Libor plus 575 bps.

The deal included $38.45 million of subordinated notes. American Capital said it purchased $8 million of the non-rated equity tranche of subordinated notes and third-party investors purchased the remaining $30.5 million.

American Capital CLO Management, LLC manages the CLO.

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