Loan fund inflow streak snapped at 95 weeks

For the first time since June 2013 retail-cash outflows were logged from bank loan mutual funds and exchange-traded funds as $249 million was pulled in the week ended April 16, according to Lipper.

To be sure, the outflow was not unexpected and inflows over the previous four weeks had dwindled steadily to just positive $48 million last week, a 75-week low. For the record, as outflows go, this week’s was also the largest since October 2011.

With this result the four-week trailing average slumps to positive $46 million, from positive $190 million last week, and $321 million in the week prior. Of this week’s total outflow, 9% was tied to the ETF segment.

The streak of retail cash inflows into loan funds ran 95 weeks, for a total of $66.7 billion over that span, by the weekly reporters only.

Year-to-date inflows total $6.7 billion, of which $1.06 billion is ETF-related, or 16% of the sum. In the comparable year-ago period, inflows were $14.1 billion, with 12% tied to ETFs.

The change due to market conditions was negative $190 million. Total assets stood at $109.1 billion at the end of the observation period, with ETFs comprising $8.4 billion of the total, or approximately 8%. – Jon Hemingway



NXT Capital prices $357M CLO via Wells Fargo; AAAs at 175 bps; 19th deal in April

Wells Fargo today priced a $357.4 million CLO for NXT Capital, according to market sources. BMO was a co-lead for the transaction.

The CLO is structured as follows:

The transaction has a two-year non-call period, and a four-year reinvestment period.

Including NXT’s CLO issuance totals $32.77 billion across 64 deals, according to LCD. In April, 19 deals have priced totaling $10.13 billion. – Sarah Husband



AFA Foods (“pink slime” producer) exits Chapter 11; estate seeks $84M in clawbacks

The Chapter 11 liquidation plan for AFA Foods took effect on Wednesday, court records show, following bankruptcy court confirmation of the company’s plan on March 7.

U.S. Bankruptcy Judge Mary Walrath approved a global settlement resolving all key disputes remaining in the case last July. Lawyers for the bankrupt estate are now attempting to claw back about $84 million for creditors. AFA’s estate recently filed 125 suits seeking to recover allegedly preferential payments made to vendors and other parties in the weeks leading up to the company’s April 2012 bankruptcy filing, according to Law360.

Although the gross amount sought by the suits is about $84 million, the net value to creditors will likely be in the $15 million range due to the offset rights of some of the targets, Law360 reported.

AFA repaid its senior lenders last year after selling its meat-processing facilities, which brought in a total of $69.7 million. The company was left with about $14 million in cash on hand after repaying its $56 million debtor-in-possession credit facility.

AFA filed for Chapter 11 in April 2012, in the wake of negative media reports on one of its primary products, a lean, finely-textured processed beef often added to ground beef and known pejoratively as “pink slime.” The ground-beef processing company, based in King of Prussia, Pa., blamed its filing on “recent changes in the market for its ground-beef products and the impact of media coverage related to boneless lean beef trimmings.”

AFA became the subject of media scrutiny as early as 2009, when its facility in Ashville, N.Y., recalled more than 500,000 pounds of ground beef after it was linked to an outbreak of E. coli that killed two people and sickened about 500 others, according to The New York Times. The beef trimmings commonly used to make ground beef are more susceptible to contamination because E. coli thrives in cattle feces that can get smeared on the surfaces of whole cuts of meat, the newspaper reported.

The company faced another blow in March of 2012 when a series of reports by ABC News criticized boneless lean beef trimmings, also referred to as “pink slime,” which ABC said is added to 70% of ground beef sold in U.S. supermarkets. “Once only used in dog food and cooking oil, the trimmings are now sprayed with ammonia so they are safe to eat and added to most ground beef as a cheaper filler,” ABC News said. Still, the product meets federal food-safety standards and has been used for years, according to the Associated Press.

In the wake of the report, large grocery-store chains like Kroger pulled the product from their shelves.

Jones Day, Imperial Capital, and FTI Consulting advised AFA in its restructuring. – John Bringardner