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Ares preps novel short-duration CLO via Deutsche Ban

Deutsche Bank is arranging a new CLO transaction for Ares, according to market sources. The transaction, which is described as a short-duration CLO, is expected to price on April 28. It will target 96% first-lien loan collateral and is Volcker compliant.

The structure is designed to tap into current demand for short-duration paper, and has no reinvestment period and a one-year non-call period, enabling the deal to amortize quickly. Further, the manager can only reinvest up to 50% of loan prepayments, and 100% of credit-risk/credit-improved sales. It has a 10-year final legal maturity.

The transaction is guided as follows:

According to the marketing material, the transaction combines the best features of 1.0 and 2.0 CLOs, and aims to offer an investment alternative versus CLO 1.0 or refinanced 2011/2012 CLO bonds.

  • It can reinvest proceeds of credit-risk/improved and prepaid collateral proceeds in securities at greater than par, which differentiates it from most CLO 1.0 or 2.0 deals.
  • It offers a significant OID versus a typical 2.0 deal.
  • The documentation prohibits single tranche refinancing or repricing, and caps A-to-E activity.

– Sarah Husband

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Obituary: Keith Barnish, 58, was loan market pioneer

Keith Barnish, a loan market pioneer, died on April 20 at the age of 58. Over his distinguished, 30-plus-year career, Barnish held senior positions at Toronto-Dominion Bank, Security Pacific Bank, Bank of America, and Bear Stearns, where he held the title of Co-head of Global Acquisition Finance and Financial Sponsors. Most recently, Keith was Senior Managing Director and Head of Leveraged Asset Management at Doral Financial Corp.

Over his long tenure in the loan market, Barnish was a mentor and great friend to legions of leveraged finance and capital markets professionals, many of whom credit him with being an original thinker who played an important role in propelling a nascent loan syndications business to the global investment capital market that it is today.

Barnish is survived by his loving wife, Joyce White Barnish, and their beloved children, Ashley, Keith, and Justin. In lieu of flowers, the family would appreciate donations to the Delbarton School, for the renovation of Old Main, 230 Mendham Rd., Morristown, N.J., 07960.

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Tronox $1.48B leveraged loan repricing enters secondary above par issuance

tronox_200x200Accounts this afternoon received allocations of the $1.48 billion repriced term loan for Tronox, which broke for trading into a 100/100.375 market, from issuance at par, sources said. The covenant-lite loan due March 2020 is priced at L+300, with a 1% LIBOR floor. Goldman Sachs and UBS arranged the transaction, which reduces the spread by 50 bps, from L+350 currently; the existing loan is callable at par. The transaction cleared wide of original talk, while the arranger also added ratings-based step-ups in pricing. Oklahoma City-based Tronox is a global producer of titanium-dioxide pigment, which creates whiteness, brightness, and opacity in paint, paper, and plastic. Terms:

Borrower Tronox
Issue $1.48 billion TLB
UoP Repricing
Spread L+300
LIBOR floor 1.00%
Price 100
Maturity March 2020
YTM 4.06%
Call protection 12 months 101 soft call
Corporate ratings BB/Ba3
Facility ratings BBB-/Ba2
S&P recovery rating 1
Financial covenants none
Arrangers GS, UBS
Admin agent GS
Price talk L+275-300/0.75%/100
Notes Includes 25 bps step-ups at B+/B1 and B/B2