DoubleLine prices $409.5 million; Commerzbank reprices 2016 CLO, original CLO sees losses

By Cristal Cody

Tupelo, Miss., May 9 – DoubleLine Capital LP priced $409.5 million notes in the CLO manager’s first deal since 2015.

In the European market, Commerzbank AG, London Branch repriced €254.4 million of notes from the 2016 CLO transaction, Bosphorus CLO II DAC.

Fitch Ratings said in a release on April 26 that the original CLO deal crystallized “approximately 25 [basis points] of losses following reinvestment of unscheduled proceeds at premium prices prior to the end of the reinvestment period. This has resulted in a slight deterioration of credit enhancement for the rated notes as well as the over-collateralization cushions.”

The CLO’s reinvestment period expired on April 15, Fitch said.

In other refinancing action, Blackstone/GSO Debt Funds Management Europe Ltd. refinanced two euro-denominated CLOs, Sorrento Park CLO Ltd. and Holland Park CLO Ltd., according to a market source. Final pricing details were not available by press time.

More than €9 billion of euro-denominated CLOs have been refinanced year to date, according to market sources.

Some European CLO “investors reported struggles to stay invested, as the refinancing/re-set wave often led to assets being called away,” Wells Fargo Securities, LLC analysts said in a note on Tuesday following meetings with market participants in London over the past week. “Investors reported that refi pricing for euro CLOs was less efficient and less predictable than refi pricing on U.S. CLOs – or even that it was ‘too soon’ for Euro refis.”

DoubleLine brings new deal

DoubleLine Capital priced $409.5 million notes due July 20, 2029 in the Parallel 2017-1 Ltd./Parallel 2017-1 LLC CLO deal, according to a market source.

The CLO sold $252 million of class A-1 floating-rate notes at Libor plus 131 bps in the senior tranche.

Morgan Stanley & Co. LLC arranged the offering.

Proceeds will be used to purchase a portfolio of about $400 million of mostly senior secured leveraged loans.

Collateral consists of broadly syndicated first-lien senior secured corporate loans.

DoubleLine Capital priced its first CLO deal in 2015.

The investment management firm is based in Los Angeles.

Commerzbank reprices €254.4 million

Commerzbank priced €254.4 million of notes due Oct. 15, 2025 in a repricing of a 2016 euro-denominated CLO offering, according to notices to noteholders on Tuesday.

Bosphorus CLO II sold €163.7 million of class A secured floating-rate notes at Euribor plus 70 bps in the AAA-rated tranche.

Stifel, Nicolaus & Co., Inc. arranged the deal.

In the original €277.7 million transaction, priced on March 24, 2016, the CLO sold €163.6 million of class A floating-rate notes at Euribor plus 143 bps.

The deal is backed primarily by broadly syndicated senior secured leveraged loans and bonds mostly issued by European borrowers.

Proceeds will be used to redeem the original notes.

Commerzbank has priced one new CLO and refinanced one vintage CLO year to date.

The firm priced one new CLO in 2016 and one deal in 2015.

The London-based CLO manager is a subsidiary of global banking and financial services company Commerzbank AG.

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