Deutsche Bank Prices Oak Hill Loan Deal

Underwriter Deutsche Bank has priced the notes for Oak Hill Advisors' approximately $500 million collateralized loan obligation called Oak Hill Credit Partners II. The cash-flow deal will be approximately 85% loans with a 15% bond bucket, according to one portfolio manager. The amount of collateral already bought for the deal could not be determined. Officials at Oak Hill declined comment, referring questions to Deutsche Bank. The banker responsible for the deal did not return calls.

The $351 million triple-A tranche priced at LIBOR plus 55 basis points and was sold at par. There are two double-A tranches, with a $5 million piece that priced at LIBOR plus 90 basis points and a $32 million fixed rate piece at 5.24%. The equity tranche was $40 million. The deal is only one of a handful to price this year, with Katonah Capital Management's Katonah CLO V breaking the ice (LMW, 2/10). Citibank priced notes for HarborView Asset Management's HarborView CLO V as Loan Market Week went to press and a number of deals are said to be in the final marketing phase.

Explaining reasons for the quiet new issue so far this year, one analyst said there has been some impact from the Financial Accounting Standard Board's recent FIN-46 interpretation. But, he added the reason for the lack of pricing action is predominantly due to the supply and demand hangover from year-end and declining arbitrage.