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Fortress refinancing and upsizing 2015-vintage Hildene CLO IV

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Fortress Investment Group is refinancing, and upsizing, a collateralized loan obligation that was originally issued in 2015. The $350 million Hilden CLO IV is issuing another $200 million of notes in the process and its reinvestment period is being extended by five years and the noncall period by two years.

Once the refinancing is completed on July 23, the CLO will be renamed Fortress Credit BSL VI.

The refinancing will result in a spread of Libor plus 115 basis points on the senior notes, which are rated AAA by S&P Global Markets; that compares with a spread of Libor plus 150 basis points originally.

Additional collateral for the transaction, nearly half (48%) of the total, in fact, will come from another CLO, Fortress VI, via a participation agreement.

The deal cannot be called, or repaid early, until July 2020, and Fortress can actively manage the collateral until July 2023 (assuming the deal has not been called by that point). The weighted average life of the collateral has also been extended to nine years.

Goldman Sachs is the underwriter.

The portfolio is Fortress’ second transaction of 2018, following the March 29 printing of the $702.8 million Fortress Credit Opportunities 2018-11 via Natixis, according to Thomson Reuters LPC. (That deal priced at 130 basis points wide of Libor for the senior notes.)

The deal is among four that Fortress issued through its Hildene platform in the post-crisis era.

Fortress, a $38.2 billion asset management firm, is owned by the Japanese conglomerate Softbank Group Corp. It manages a total of 15 CLOs.

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