Apollo prices €357 million; MidOcean sells CLO; U.S., Europe secondary trading picks up

By Cristal Cody

Eureka Springs, Ark., May 16 – Details emerged Monday on two new CLO deals priced in the U.S. and European primary markets.

Apollo Management International LLP sold €357 million of notes in a new euro-denominated deal.

The transaction is the first European CLO to price in May, but more are in the pipeline, according to market sources.

In U.S. pricing action, MidOcean Credit Fund Management LP sold a $405.25 million CLO.

“March and April saw an average of $5 [billion] in monthly U.S. CLO volume, which is currently tracking another $5 [billion] in May,” J.P. Morgan Securities LLC analysts said in a note.

In the secondary market, BWIC volumes were strong over the previous week, totaling just over $781 million on strong activity in CLO 2.0/3.0s AAs, As, BBs and equity, according to a BofA Merrill Lynch market note.

“Similar to the previous two weeks, spread tightening in CLO 2.0/3.0s was confined to the investment grade parts of the capital structure with AAs and As both contracting 10 bps [week over week] to 215 and 315 bps, respectively,” BofA Merrill Lynch analysts said.

In European CLO secondary trading, the €110 million of bonds that appeared on BWIC lists in the past week was the highest for two months, according to BofA Merrill Lynch.

“Most trading activity was focused on the lower parts of the capital structure, with a fairly even split across 1.0 and 2.0 bonds,” the analysts said. “The market appears to be benefiting from strong technicals, with limited supply helping drive spreads tighter.”

European CLO 2.0 A-rated bonds are now trading in the low 300 bps area, while 2.0 BBB spreads are trading in the low/mid 400s, the note said.

Apollo prices €357 million

Apollo Management International printed €357 million of notes due July 15, 2029 in the CLO offering, according to a market source.

ALME Loan Funding V BV priced €213.8 million of class A floating-rate notes at Euribor plus 145 bps in the senior tranche.

Barclays arranged the deal.

The CLO has a non-call period that ends July 15, 2018 and a reinvestment period that ends July 15, 2020.

The deal is backed primarily by euro-denominated senior secured loans.

The investment firm is based in London.

MidOcean brings CLO V

MidOcean Credit Fund Management priced a $405.25 million CLO, according to a market source.

MidOcean Credit CLO V/MidOcean Credit CLO V LLC sold $256 million of class A floating-rate notes at Libor plus 170 bps at the top of the capital structure.

Credit Suisse Securities (USA) LLC was the deal arranger.

The affiliate of New York City-based private equity firm MidOcean Partners brought one CLO transaction to market in 2015.

© 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.