Ares brings €310 million CLO; Telos prices; 'best' AAA notes offered at Libor plus 125 bps

By Cristal Cody

Tupelo, Miss., July 17 - Ares Management LLC priced the €310 million Ares European CLO VI Ltd. on Thursday, while Telos Asset Management LLC raised about $363 million in a collateralized loan obligation offering of notes, according to informed sources.

Los Angeles-based Ares Management launched the European CLO, its first since 2007, over the last week of June, according to one informed source.

Pricing terms were not immediately available.

Credit Suisse Group AG was the placement agent.

Additional European CLO transactions are in the pipeline, sources report, from 3i Debt Management, Pramerica Investment Management Ltd. and other CLO managers.

Earlier in the week, Intermediate Capital Group plc said on Monday that it priced a €400 million CLO in Europe.

About €5 billion to €7 billion in new CLO issuance is forecast in Europe for the year.

Fitch Ratings said in a report on Wednesday that the "return of the European CLO, albeit on a limited basis, should provide a financing exit for some credits, notably those that cannot tap other means of financing."

Fitch said that lending constraints are a "major concern for leveraged loan CLOs, where traditional banking and structured finance-related funding sources have dried up."

Telos offering

Telos Asset Management priced the Telos CLO 2013-4, Ltd./Telos CLO 2013-4, LLC transaction on Thursday, according to informed sources.

Terms were not available by press time but it was expected that the tranches priced "wide" as the few new issues that have been offered in July have come near the same weaker levels seen in June, one source said.

The "best" CLO managers are pricing AAA-rated tranches in the capital structure in the area of Libor plus 125 basis points, the source said.

Telos Asset Management was expected to price $3.5 million of class X notes due July 15, 2017 (Aaa//); $214 million of class A notes due July 15, 2024 (Aaa//); $46.5 million of class B notes due July 15, 2024; $29 million of class C notes due July 15, 2024; $19.25 million of class D notes due July 15, 2024; $16 million of class E notes due July 15, 2024 and $35 million of subordinated notes due July 15, 2024.

BNP Paribas Securities Corp. was the placement agent.

The issue has a non-call period that ends July 15, 2015 and a reinvestment period that ends July 15, 2017.

The notes are collateralized primarily by broadly syndicated first-lien senior secured corporate loans.

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