After sitting out the first half of the year, Golden Asset Management on Friday refinanced a 2016-vintage collateralized loan obligation, lowering the interest rates just ahead of a quarterly payment due in July.

According to JPMorgan, GoldenTree also upsized GoldenTree Loan Opportunities XII to $413 million from $409 million originally with the help of GreensLedge Capital Markets.

The deal was one of nine CLOs that were resets or refinanced on Friday alone, as managers rushed to lower payment prior to the holiday week and July quarterly payments to investors.

Friday’s activity brought issuance for June as a whole to 3 deals totaling $30.9 billion, including both new-issue and refinancings/resets, according to JPMorgan. More than half, $15.8 billion, involved refinancings and resets.

GoldenTree XII was expected to price at 104 basis points over three-month Libor on the $245 million senior Class A-R replacement notes tranche, according to a June 25 presale report from Fitch. That's 49 basis points inside the Libor plus 153 basis points it was paying previously

GoldenTree also narrowed the spread on each of the exisiting subordinate tranches, all of which pay floating rates of interest, In addition, it issued a tranche of Class B-2-R notes paying a fixed rate of 4.5%.

The upsizing resulted in a higher proportion of mezzanine notes outstanding.The $45 million Class A-2 tranche (rated Aa2 by Moody's Investors Service) has been reduced to $15 million while the Class B,C, and D notes being increased by $15.2 million; meanwhile, a new Class E tranche sized at $16.5 million was introduced. (The Class E notes were unrated).

GoldenTree maintains a nearly 10% residual tranche in the deal ($41.4 million) representing the equity stake in the portfolio. (The original deal was not classified by Fitch Ratings as compliant with U.S. risk-retention rules; GoldenTree XII was issued prior to the December 2016 enforcement of short-lived federal regulations requiring CLO managers to retain at least 5% of the notional value of sponsored deals to align interests with investors).

GoldenTreet has six CLOs issued since 2012 that are outstanding, and it hasn't refinanced any of them since December 2017, when it lowered th e interest payments on the $551 million GoldenTree Loan Opportunities Fund XI. The management firm has one more deal that has exited its non-callable period and so is eligible to be refinanced but to has not been, according to Fitch Ratings.

While It may now be too late to refinance or reset CLOs in time to lower July payments, the trend is expected to continue. Wells Fargo reckons that there are $47 billion of outstanding CLO notes across 95 deals exiting non-call periods over the remainder of the year – making the deals eligible to refinance or reset, or to be called by managers.

With new-issue AAA spreads between 104 and 110 basis points for most broadly syndicated CLOs in June, managers were able to tighten senior-note coupons that averaged 160 basis points in June 2016, according to Thomson Reuters LPC.

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