3i Debt Management raises €425 million; European CLO AAAs hold at Euribor plus 140 bps

By Cristal Cody

Tupelo, Miss., Feb. 26 - 3i Debt Management Investments Ltd. priced the AAA-rated tranche in the €425 million Harvest VIII CLO Ltd. transaction in line with the two other European CLOs brought in 2014, according to informed sources on Wednesday.

The CLO priced the AAA slice at Euribor plus 140 basis points, a source said.

The Carlyle Group LP's €375 million Carlyle Global Market Strategies Euro CLO 2014-1, Ltd. transaction sold on Monday priced the AAA tranche at Euribor plus 140 bps, a source said. Alcentra Ltd. brought the €413.5 million Jubilee CLO 2014-XI BV offering on Jan. 24, also with the AAA tranche at Euribor plus 140 bps, according to a market source.

Intermediate Capital Group plc's €360 million St. Paul's CLO IV Ltd. transaction is expected to price by the end of the week, according to a market source.

About €10 billion to €15 billion of European CLO issuance is forecast for 2014, according to J.P. Morgan Securities plc analysts.

AAAs at Euribor plus 140 bps

3i Debt Management Investments sold an upsized €425 million of notes due April 30, 2026 in the Harvest VIII CLO deal, according to an informed source on Wednesday.

The CLO priced €243 million of class A floating-rate notes (//AAA) at Euribor plus 140 bps; €47 million of class B floating-rate notes (//AA) at Euribor plus 190 bps; €27 million of class C floating-rate notes (//A) at Euribor plus 235 bps; €21 million of class D floating-rate notes (//BBB) at Euribor plus 325 bps; €31 million of class E floating-rate notes (//BB) at Euribor plus 450 bps; €10 million of class F floating-rate notes (//B) at Euribor plus 525 bps and €46 million of subordinated notes.

The deal was upsized from about €310 million.

Resource Capital Markets, Inc. and RBS Securities Inc. arranged the offering.

3i Debt Management Investments will manage the CLO, which is backed primarily by European senior secured loans and senior secured bonds.

Proceeds from the deal will be used to purchase a €412 million portfolio of European leveraged loans and bonds.

3i, part of London-based 3i Group plc, priced the €309.6 million Harvest CLO VII Ltd. transaction in August.

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