Oaktree reprices €369.75 million CLO; euro volume forecast to hit post-crisis high

By Cristal Cody

Tupelo, Miss., March 12 – European CLO primary and refinancing issuance is expected to increase in 2018 following a busy pace in the first two months of the year.

Nearly €5 billion of euro-denominated CLOs have priced year to date, and several new deals are in the pipeline, market sources report.

In European refinancing action, Oaktree Capital Management (UK) LLP priced €369.75 million of notes in a repricing of a 2016 CLO.

Arbour CLO III Ltd. sold €10 million of 1% class A-1R senior secured fixed-rate notes and €230 million of class A-2R senior secured floating-rate notes at Euribor plus 58 basis points at the top of the capital structure.

BofA Merrill Lynch analysts now expect euro-denominated CLO issuance to hit a post-financial crisis high of €22 billion to €25 billion in 2018, up from their previous forecast of €18 billion, according to a research note released on Monday.

“2018 YTD European leveraged loan issuance is up nearly 60%, driven by an active LBO market,” the analysts said. “Issuance conditions are attractive for CLOs and we understand a large number of warehousing facilities have been opened. Given the pace of CLO issuance so far this year, and the prospects for continued elevated supply through the second quarter, we now think that CLO issuance is likely to surpass 2017 volumes.”

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