Pramerica delays European CLO; Palmer Square sells Aaa notes at 140 bps; Brigade CLO eyed

By Cristal Cody

Tupelo, Miss., Aug. 15 - Pramerica Investment Management Ltd. postponed pricing its second European CLO offering until later in the year just as optimism for an increase in issuance was growing, according to informed sources on Thursday.

Pramerica had been expected to bring the CLO since July.

The European CLO market initially was forecast to see about €4 billion or €5 billion of new transactions in 2013, but expectations grew after GSO Capital Partners LP raised €413.2 million in the Herbert Park BV CLO following new European CLOs from 3i Debt Management Investments Ltd. and Haymarket Financial LLP in August.

In the U.S. CLO market, Palmer Square Capital Management LLC sold $463.8 million of notes due Aug. 15, 2025 in eight tranches in its second CLO deal this year.

The Palmer Square CLO 2013-2, Ltd./Palmer Square CLO 2013-2, LLC sold the Aaa-rated tranche at Libor plus 140 basis points, coming in about 5 bps wider than recently priced deals, according to informed sources.

The Leawood, Kan.-based investment management firm sold its first CLO, the $362 million Palmer Square CLO 2013-1, Ltd. offering, in April. The 2013-1 CLO priced the $212.8 million AAA-rated tranche at Libor plus 125 bps.

Coming up in the primary market, Brigade Capital Management, LLC is expected to bring a $416.5 million CLO, according to market sources.

Pramerica delays European CLO

Pramerica Investment Management's €306.2 million Pinewood CLO 2013-1 BV deal has been postponed until later in the year, according to an informed source.

Investec Securities Ltd. and Wells Fargo Securities, LLC are the joint placement agents on the deal.

Pramerica is the London-based leveraged finance arm of Newark, N.J.-based Prudential Financial, Inc.

In May, Prudential closed the €300 million Dryden XXVII Euro CLO 2013 BV offering of seven tranches of notes due June 25, 2025, its first post-financial crisis European CLO deal.

Palmer Square CLO prices

Palmer Square CLO 2013-2 sold $463.8 million of notes due Aug. 15, 2025 in eight tranches, according to informed sources.

The CLO priced $266.1 million of series A-1a senior secured floating-rate notes (Aaa) at Libor plus 140 bps; $10 million of 3.121% class A-1b senior secured fixed-rate notes (Aaa); $66.6 million of class A-2 senior secured floating-rate notes at Libor plus 200 bps and $32.1 million of class B senior secured deferrable floating-rate notes at Libor plus 305 bps.

The CLO also priced $23 million of class C senior secured deferrable floating-rate notes at Libor plus 362.5 bps; $18.3 million of class D secured deferrable floating-rate notes at Libor plus 535 bps; $9.15 million of class E secured deferrable floating-rate notes at Libor plus 615 bps and $38.55 million of subordinated notes.

J.P. Morgan Securities LLC arranged the deal.

Palmer Square Capital Management LLC is the CLO manager.

Brigade preps CLO offering

CLO manager Brigade Capital Management expects to price the $416.5 million CLO offering of seven tranches of notes due Oct. 22, 2025 via BofA Merrill Lynch, according to market sources.

The Battalion CLO IV Ltd./Battalion CLO IV LLC deal includes $241 million of class A-1 senior secured floating-rate notes (Aaa); $50 million of class A-2 senior secured floating-rate notes; $35 million of class B senior secured deferrable floating-rate notes; $22 million of class C senior secured deferrable floating-rate notes; $19 million of class D secured deferrable floating-rate notes; $11 million of class E secured deferrable floating-rate notes and $38.5 million of subordinated notes.

The transaction is expected to close on Sept. 19.

Brigade Capital Management, a New York City-based investment adviser firm, last priced a CLO in December when it closed on the $402.39 million Battalion CLO III Ltd. transaction.

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