Guggenheim brings European CLO; CIFC prices; Carlyle offers $509.1 million; AAAs soften

By Cristal Cody

Tupelo, Miss., Nov. 9 – Guggenheim Partners Europe Ltd. raised €406.5 million of notes due Nov. 16, 2028 in the firm’s first euro-denominated CLO via a private placement offering.

The deal brings total new European broadly syndicated CLO issuance to €11.3 billion year to date, according to BofA Merrill Lynch.

“Primary market conditions remain difficult, with spreads wider than they have been for most of the period since the European market restarted in 2013,” BofA Merrill Lynch analysts said in a report. “Although numerous deals are reportedly in the pipeline and we expect to see more deals appear before year-end, without an improvement in pricing, total issuance looks likely to fall short of our €15 [billion] forecast for 2015.”

Details also emerged on Oak Hill Advisors (Europe), LLP’s €415.8 million Oak Hill European Credit Partners IV Designated Activity Co. transaction.

In the U.S. primary market, CIFC Asset Management LLC priced a $510.5 million CLO, its fifth new CLO deal of the year.

Coming up in the pipeline, Carlyle Investment Management LLC plans to price a $509.1 million CLO.

Year to date, about $87 billion of broadly syndicated CLOs have priced, while total supply including refinancings and middle market issuance is about $97.5 billion, according to market sources and Prospect News data.

J.P. Morgan Securities LLC analysts forecast 2016 U.S. CLO supply of $60 billion to $70 billion, excluding refinancings, down from the $100 billion forecasted for 2015.

“This is a sizable drop, but we think the journey is to a more sustainable pace at this point in the cycle, with still meaningful investable supply,” the analysts said in a market note.

Risk retention rules that take effect in December 2016 are expected to impact issuance.

“In 2013, 33% of managers who issued were first time post-crisis versus 17% in 2014 and only 9% YTD,” the JPMorgan analysts said. “First-time issuance as a percentage of total AUM has decreased from 20% to 5%, 2013 to 2015.”

Barclays Bank plc analysts said on Friday they estimate $70 billion to $80 billion of CLO volume in 2016.

AAAs slightly wider

In the U.S. secondary market, more than $590 million of bonds were on BWIC lists over the past week, slightly higher than the 52-week average of about $570 million, according to the BofA Merrill Lynch report.

“Activity continued to be concentrated in AAAs while mezz and equity saw minimal action for the week,” the analysts said.

Trading in non-Volcker compliant deals “pushed AAA spreads slightly wider, to the 168 bps context, with buyers demanding a premium for this less liquid paper,” the analysts said. “Otherwise spreads remained unchanged at the wide levels for the year.”

Guggenheim prices CLO

In primary action, Guggenheim Partners Europe raised €406.5 million of notes due Nov. 16, 2028 in the Cork Street CLO Designated Activity Co. deal, according to a market source.

The CLO priced €127.3 million of class A-1A senior secured floating-rate notes (Aaa//AAA) at Euribor plus 145 bps in the AAA-rated tranche.

Citigroup Global Markets Inc. was the placement agent.

Guggenheim Partners Europe is a Dublin-based subsidiary of global asset manager Guggenheim Partners, LLC.

Oak Hill brings CLO

CLO manager Oak Hill Advisors (Europe) priced €415.8 million of notes due Nov. 30, 2029 in the Oak Hill European Credit Partners IV offering, according to a market source.

The CLO sold €122.2 million of class A-1A senior secured floating-rate notes (Aaa//AAA) at 99.5 with a coupon of Euribor plus 140 bps in the senior tranche.

Goldman Sachs & Co. was the placement agent.

Proceeds from the transaction will be used to purchase a €400 million portfolio of European leveraged loans and bonds.

Oak Hill Advisors (Europe) has two euro-denominated CLOs year to date.

The credit manager is based in London.

CIFC prints $510.5 million

In the U.S. primary market, CIFC Asset Management priced a $510.5 million CLO transaction, according to a market source.

CIFC Funding 2015-V, Ltd./CIFC Funding 2015-V, LLC printed $320 million of class A-1 floating-rate notes at Libor plus 155 bps at the top of the capital structure.

Credit Suisse Securities (USA) LLC was the placement agent.

CIFC Asset Management has priced five CLO offerings and refinanced one vintage CLO deal year to date.

The New York-based credit manager priced four CLOs in 2014.

Carlyle preps deal

Carlyle Investment Management is offering $509.1 million of notes in a new CLO transaction via Citigroup Global Markets, according to a market source.

The Carlyle Global Market Strategies CLO 2015-4, Ltd./Carlyle Global Market Strategies CLO 2015-4 LLC deal includes $321.8 million of class A-1 floating-rate notes (//AAA), $55 million of class A-2A floating-rate notes; $24.65 million of class B floating-rate notes; $33.35 million of class C floating-rate notes; $25.4 million of class D floating-rate notes and $49.1 million of subordinated notes.

Proceeds from the transaction will be used to purchase a portfolio of about $500 million of primarily senior secured leveraged loans.

Carlyle Investment Management has priced two U.S. broadly syndicated CLO deals and one middle-market CLO offering year to date.

The asset management firm is an affiliate of the Washington, D.C.-based Carlyle Group.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.