Cairn to issue new notes in vintage €300.5 million Cairn CLO III deal

By Cristal Cody

Tupelo, Miss., Sept. 3 – Cairn Capital Ltd. plans to issue new notes in its vintage 2013 euro-denominated collateralized loan obligation transaction, Cairn CLO III BV, and appoint a new CLO manager, according to a notice to noteholders.

Cairn originally sold €300.5 million of senior secured floating-rate notes and subordinated notes due April 20, 2025 in its first European leveraged loan CLO offering since 2010 on Feb. 20, 2013.

Cairn CLO III priced €181.5 million of class A senior secured floating-rate notes (Aaa/AAA/) at Euribor plus 140 basis points; €28 million of class B senior secured floating-rate notes (Aa2) at Euribor plus 235 bps; €20 million of class C senior secured deferrable floating-rate notes (A2) at Euribor plus 325 bps and €11 million of class D senior secured deferrable floating-rate notes (Baa2) at Euribor plus 425 bps.

The deal also included €44.5 million of class M1 subordinated notes and €15.5 million of class M2 subordinated notes.

Credit Suisse Securities (Europe) Ltd. arranged the offering.

According to the notice, the CLO plans to issue additional class D notes, fungible with the existing class D notes; issue one or more new classes of mezzanine notes that will be subordinated to the class D notes and senior to the class M subordinated notes; price a new class of subordinated notes that will be subordinated to the new mezzanine notes and redeem the existing class M subordinated notes with proceeds from the issuance of the new class D notes, mezzanine notes and subordinated notes.

The CLO plans to extend the non-call period, reinvestment period and the maturity date.

In addition, the original CLO manager, Cairn Capital, will be replaced with Cairn Loan Investments LLP, which is expected to purchase and hold a sufficient principal amount of the new subordinated notes to comply with European risk retention regulations.

Cairn Loan Investments priced €308.55 million of notes due June 22, 2028 in the Cairn CLO V BV transaction on May 21.

Cairn Loan Investment, a London-based credit asset management firm, priced one euro-denominated CLO in 2014.

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