The collateralized loan obligation market shows no signs of slowing down as four deals totaling nearly $2.0 billion joined the new-issue pipeline so far this week, according to presale reports published by Moody’s Investors Service and Standard & Poor’s.
Angelo, Gordon, & Co. is readying a $556.8 million transaction, Northwoods Capital XII, backed by a revolving pool consisting primarily of broadly syndicated senior secured loans. As of August 4, 86.13% of the collateral pool has been identified. S&P assigned a preliminary AAA’ rating to the $376.2 million floating-rate class A notes. The notes are being marketed at three-month Libor plus 150 basis points, benefiting from a subordination of 38.91%. They mature in September 2026.
The deal has a four-year reinvestment period and two-year non-call period—in line with recently marketed CLOs.
Goldman Sachs & Co. is the placement agent.
Angelo, Gordon, & Co. issued its previous CLO, the $621.8 million Northwoods Capital XI, in April. As of June 2014, the company has approximately $2.579 billion in S&P-rated US CLO assets.
Steele Creek Investment Management is also in the market with a $400 million CLO—Steele Creek 2014-1. As of July 21, 2014, 75% of the portfolio had been identified. Moody’s has assigned provisional Aaa’ status to the $213.8 million class A-1 notes and $40 million class A-2 notes. The A-1 notes will be marketed at three-month Libor plus 160 basis points and the A-2 notes at three-month Libor plus 150 basis points. Both classes benefit from an effective subordination of 36.6% and mature in August 2026.
The deal, like Northwoods Capital XII, has a typical four-year reinvestment period and two-year non-call period.
BNP Paribas Securities is the underwriter.
Steele Creek Investment Management is the CLO management platform for Moelis Asset Management, established in 2013. Moelis has over $2.9 billion in assets under management.
While most CLOs issue only floating-rate notes, new deals from Och-Ziff Loan Management and Oaktree Capital Management will include both floating and fixed-rate notes. Moody’s notes that this could lead to a mismatch between the amount of interest paid on floating-rate loans in the CLOs’ portfolios and the interest that they pay out on the fixed-rate notes.
Oaktree’s $470 million Oaktree EIF II Series A1 will be backed by a revolving pool consisting primarily of broadly syndicated senior secured loans. As of August 4, 100% of the portfolio has been identified. S&P preliminarily rated the $390 million floating-rate class A notes AAA.’ The notes will be offered at three-month Libor plus 147 basis points, benefiting from 40.46% subordination. S&P assigned the fixed-rate, $40 million class B-2 notes AA’ provisional status; they are marketed at 4.25%. The notes will mature in August 2025.
The deal’s reinvestment period ends May 13, 2018 and the notes are non-callable until August 15, 2016.
The lead placement agent is Mitsubishi UFJ Securities.
Oaktree, founded in 1995, is a global investment management firm focused on alternative markets. It manages four CLOs with $2.291 billion in assets.
Och Ziff’s OZLM VII will also issue both fixed-rate and floating-rate notes. Moody’s provisionally assigned an Aaa’ rating to the $315 million floating-rate class A-1 notes, which will be marketed at three-month Libor plus 144 basis points and benefit from effective subordination of 37.0%. The $30 million class A-2B notes, preliminarily rated Aa2,’ will be offered at a fixed-rate of 4.40%, and benefit from effective subordination of 24.2%. The notes will mature in October 2026.
The deal has a standard four-year reinvestment period and two-year non-call period.
Merrill Lynch, Pierce, and Fenner & Smith are the underwriters.
Och Ziff’s previous transaction, the $842 million OZLM VII, was issued in late June. The deal was upsized from the $600 million originally on offer. The $310 million class A-1a notes, rated Aaa’ by Moody’s, priced at a spread of 142 basis points over Libor. The $190 million class A-1b notes priced at Libor plus 149 basis points. Both benefit from a subordination of 37.5%.
Och Ziff Loan Management is a global asset manager currently managing seven CLOs.