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Neuberger Berman refinances 2014 CLO for a 2nd time

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Neuberger Berman Investment Advisors is conducting a second refinancing of a collateralized loan obligation it originally issued in 2014.

According to presale reports, Neuberger Berman is stretching the reinvestment period on its $518.6 million Neuberger Berman CLO XVIII an additional 4.9 years; it is also extending the non-call period by 1.9 years. Notes being issued include a replacement triple-A $305 million Class A-1a-R2 tranche with a coupon of 115 basis points over three-month Libor.

Fitch Ratings is supplying the new rating to the refreshed deal that will have a reinvestment period through October 2023 and a non-call period through October 2020.

In the original transaction in December 2014, Neuberger Berman priced the Class A-1 notes at 148 basis points above three-month Libor. The spread shrank to 143 basis points in November 2016, when the reinvesment period was extended two years, effectively grandfathering the deal from compliance with risk retention requirements that went into effect in December 2016.

The asset manager has stepped up refinancing activity since a ruling by a three-judge federal panel in February threw out skin-in-the-game rules for CLOs.

It has so far refinanced three other transactions this year. In March it refinanced its 2016-vintage, $370.7 million Neuberger Berman CLO XXI, which was distinguished as being one of the first broadly syndicated U.S. CLOs this year to be refinanced without adding required risk-retention stakes following the federal circuit court ruling in February, pending an appeal.

On Sept. 7 the firm reset the Neuberger Berman CLO XXII, a $371 million transaction with an AAA price of 113 basis points through Bank of America Merrill Lynch. On Sept. 18, the $368 million Neuberger Berman CLO XXIII was refinanced at a spread of 105 basis points.

The firm has also printed three new-issue CLOs this year totaling $1.59 billion.

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