CIFC readies $1.2bn in new CLO issue and reset – exclusive

The asset manager’s latest CLO will mark the first investment from its partnership with a large Canadian pension plan.

Collateralised loan obligation manager CIFC is readying its fifth CLO for 2017 and is prepared to close a reset of a 2013 transaction, according to a source familiar with the situation.

CIFC 2017-V is a $510.5 million deal, on which Credit Suisse has served as the arranger, set to be priced in mid-October, this person said. The CLO will have a non-call period slightly longer than two years, a reinvestment period a little over five years and a full life of just over 13 years.

The new CLO will be managed by CIFC CLO Manager II, the first investment from a $375 million partnership between New York-based CIFC and Toronto-based Healthcare of Ontario Pension Plan, the source told Private Debt Investor. The firm announced the partnership late last month. The CLO will comply with those statutes by holding a horizontal strip of equity.

CIFC raised a total of $117.3 million for its first CIFC Strategic Partners to support the first four CLOs issued this year, according to an SEC filing. The capital was raised from CIFC’s balance sheet and one third-party investor.

A reset of a CIFC Funding 2013-II, which was a $662 million CLO on which Morgan Stanley was sole book runner, has a projected closing day of 18 October, the source said. The reset of CIFC Funding 2013-II CLO has a one-year non-call period, ending on 18 October 2019, and a five-year reinvestment period ending on 18 October 2022. The 2013 CLO, which was issued before risk-retention rules, is designed to be compliant with the regulations.

CIFC declined to comment for this story.

Year-to-date, CIFC has issued and refinanced CLOs totalling $5.9 billion, as PDI previously reported. The firm has $2.9 billion across four CLOs, stepping up its issuance dramatically from 2016, when it only issued a single new deal in December following the sale of the firm. In addition, the firm has closed $3.1 billion in CLO refinancings this year.

CIFC manages $15 billion in assets and invests in CLOs, corporate credit and structured credit. The firm was acquired by FAB Partners in August 2016 by FAB Partners for $333 million.

Editor’s note: The story has been updated to correct the risk-retention compliance structure of CIFC 2017-V.