Regatta XII prices $408.6 million new CLO; Euro-Galaxy III refinancing takes shape

Chicago, Sept. 5 – The collateralized loan obligation primary market was a little quieter on Thursday with just one reported deal pricing.

Regatta Loan Management LLC priced $408.6 million in a seven-part deal. The new portfolio was issued by Regatta XII Funding Ltd./Regatta XII Funding LLC.

The secondary market for CBO/CDO/CLO deals was also quieter on Wednesday, the most recent day data is available, according to Trace numbers.

On Wednesday, investment-grade volume was at $54.01 million. The average price was 98.5.

The non-investment grade sector picked up a little with $58.53 million exchanging hands. The average price was 95.

Regatta taps market

In the new Regatta XII portfolio, the transaction will be collateralized by a minimum of 90% senior secured loans.

A maximum of 65% of the loans in the collateral pool can be covenant-lite. And, up to 7.5% can be debtor-in-possession obligations.

Compared to other broadly syndicated CLOs from the second quarter of 2019, this CLO had a lower weighted average cost of debt, a higher weighted average spread and a lower weighted average recovery rate, according to S&P Global Ratings.

The top five obligor holdings in the portfolio by industry are insurance for the top two, hotels, restaurants and leisure for the third, auto components for the fourth and electrical equipment for the fifth.

Regatta Loan Management currently manages seven CLOs. The firm was launched by Napier Park Global Capital in 2015.

Euro-Galaxy III to refinance

Euro-Galaxy III CLO BV moved a step closer to a secondary refinancing of its vintage 2014 transaction.

Eight classes of notes are due to be refinanced.

The weighted average recovery rating (WARR) of the portfolio is 67.6% based on the assessment of Fitch Ratings.

Up to 7.5% of the portfolio can be invested in unhedged fixed-rate assets, according to Fitch.

The earlier notes are set to be redeemed on Sept. 24.

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