TPG Institutional Credit Partners and PineBridge Investments are in the market with two collateralized loan obligations totaling nearly $1 billion, according to presale reports published by Fitch Ratings and Standard & Poor’s.
TPG is preparing to its second CLO, the $515 million TCIP CLO II. Eight tranches of notes will be marketed, including two classes with preliminary AAA’ ratings from Fitch. The $282 million class A-1A notes, offered at three-month Libor plus 145 basis points and the $48 million class A-1B notes, offered at Libor plus 384 basis points. Both classes of notes benefit from a credit enhancement of 35.9%.
The deal has a standard two-year non-call period and four-year reinvestment period.
Citigroup Global Markets is the arranger and initial purchaser.
TPG’s latest CLO comes just three months after its debut issue, the $434 million TICP CLO I.
TPG, founded in 1992, is a global corporate private equity firm with over $59 billion in assets under management. It’s CLO management arm was formed in 2013.
With nine U.S. CLOs rated by S&P, PineBridge Investments is no newbie. The manager’s latest offering is the $423 million Galaxy XVIII CLO—a transaction backed by a revolving pool primarily consisting of broadly syndicated senior-secured loans. As of July 14, approximately 78% of the portfolio collateral has been identified.
Ten tranches of notes will be issued—both fixed-rate and floating-rate. The $280 million class A notes were assigned AAA’ provisional ratings from S&P and will be offered at 147 basis points over Libor. The notes benefit from subordination of 39.83%.
Both the reinvestment period and non-call period for the notes end in October 2018. The non-call period is significantly longer than the typical two-years recent CLOs have had.
PineBridge issued its last CLO in April—$414.9 million Galaxy XVII CLO. The company is a global asset manager with nearly 60 years of experience in emerging and developing markets. As of March 2014, PineBridge’s nine S&P-rated U.S. collateralized loan obligations total approximately $3.361 billion.