Oak Hill Advisors is preparing to sponsor the OHA Credit Partners XIII, Ltd., to issue $462.3 million in a broadly syndicated collateralized loan obligation (CLO). OHA Credit Partners will use the proceeds to refinance and then replace note issuance from a December 2016 transaction.
Virtually the entire collateral pool, some 90%, will be comprised of senior secured loans, cash and eligible investments, according to a preliminary assessment from S&P Global Ratings. The loans are broadly syndicated, senior-secured term loans, which are speculative-grade at ‘BB+’ or lower.
GreensLedge Capital Markets, LLC, will be the refinancing placement agent, with Oak Hill Advisors acting as collateral manager and Citibank as trustee, according to S&P.
The collateral pool allows for covenant-lite loans, with a maximum of 65%. OHA Credit Partners’ non-call period will be updated to August 19, 2023, with a reinvestment period extended about 4.75 years, to Oct. 21, 2026, according to S&P. The rating agency also noted that the weighted average life test will be extended to 9.5 years from the first refinancing date.
Also, the legal final maturity dates will be extended by about 4.75 years, to Oct. 21, 2034, matching the legal final date on the replacement notes, S&P said.
Among the notes that S&P will rate, the agency expects to assign ‘AA’ to class B-R; ‘A’ to the class C-R and ‘BBB-’ to the class D-R.
Oak Hill Advisors, L.P., the collateral manager, oversees a series of CLOs, about 20 in the U.S., with $13.5 billion in total assets under management, while specializing in the software, hotel, restaurant and leisure sectors.
Among the transactions that are still in the reinvestment period, half of them have a par amount that is more than the effective target par.
The deal also has an average senior overcollateralization cushion of 9.92%, at the transaction’s closing date.
