Littlejohn & Co’s Wellfleet Credit Partners and mid-market corporate lender NXT Capital each priced their first collateralized loan obligation of the year on Monday.

The $407.35 million Wellfleet CLO 201-1 will issue is backed by a portfolio of broadly syndicated corporate loans and will issue a $258 million senior tranche that is rated Aaa by Moody's Invesors Service and is expected to pay132 basis points over three-month Libor.

Moody's also expects to assign an Aa2 to a $47 million tranche with 23.8% subordination that pays 170 basis points over Libor.

Citigroup is the underwriter.

The deal is the fourth for Wellfleet, an an affiliate of middle-market investment firm Littlejohn from Greenwich, Conn. Wellfleet has $1.1 billion of assets under management.

The $406.35 million NXT Capital CLO 2017-1 is backed by loans to small and medium-sized companies that were originated by NXT. The trust will issue a $226 million tranche rated AAA by Standard & Poor's that pays interest of 1.75% and benefits from 44.21% subordination. The structure’s subordinate tranches totaling $82.95 million are all deferrable notes.

S&P notes that the NXT CLO has a higher total leverage and lower subordination levels, plus a lower average cost of debt, that other rated middle-market CLOs over the past three months.

The deal also has a lower-than-average cap on covenant-lite loans, which can comprise no more than 10% of the portfolio pool.

It is expected to close April 13.


NXT’s CLO arm has $6.6 billion of assets under management. This is the sponsor's fifth CLO since 2012.

So far this month, according to JPMorgan, 31 U.S. new-issue and refinanced CLO deals have priced this month totaling $14.8 billion in portfolio volume. Most of the deals ($10.2 billion) have been for refis and resets for CLOs exiting their non-call and reinvestment periods.

Year-to-date, 106 CLOs have priced totaling $50.5 billion, including $36.4 billion in refinancing. That compares to 17 U.S. CLO deals sized at $6.7 billion through March 20 of last year.

Other recent new-issues this month include Voya 2017-1 by Voya Alternative Asset Management LLC and American Money Management Corp.’s AAMC CLO 20, each of which rated last week by Moody’s.

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