Prudential prices; ICG wraps U.S. CLO, looks to other markets; euro liability spreads firm

By Cristal Cody

Tupelo, Miss., July 23 – In new U.S. CLO issuance, details emerged for Prudential Investment Management, Inc.’s $666.5 million offering of notes.

The company priced the Dryden 34 Senior Loan Fund/Dryden Senior Loan Fund LLC deal and placed the AAA tranche at Libor plus 143 basis points, a market source said.

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

The European CLO market is expected to see primary activity over the next month, according to informed sources.

London-based Intermediate Capital Group plc intends to price €361 million of notes in the St. Paul’s CLO V Ltd. CLO, the company and a market source said.

The transaction is expected to price within the next few weeks, the company reported in an interim management statement.

The European deal comes soon after the company’s U.S. CLO transaction brought on Friday. The firm sold $417 million of notes in the ICG US CLO 2014-2, Ltd./ICG US CLO 2014-2 LLC transaction.

“Last week, we priced our second U.S. CLO of $417 million, including $21 million from ICG,” the company said in the statement on Wednesday. “We also expect [in] the next few weeks to see a first close on our third Asia Pacific mezzanine fund, the pricing of our next European CLO and the formal launch of our Japanese mezzanine fund alongside our partner Nomura.”

J.P. Morgan Securities plc is the placement agent for the St. Paul’s CLO deal.

As previously reported, Pramerica Investment Management Ltd. may reopen the €300 million Dryden XXVII Euro CLO 2013 BV deal, according to an investor notice.

Barclays Bank plc is the deal arranger.

Nearly €9.5 billion of European CLOs have priced year to date, compared to more than $66 billion of U.S. CLO issuance this year, according to data compiled by Prospect News.

“New CLO creation has been more measured in Europe, in part because risk retention is already in full force,” Barclays analysts said in a research note. “This new supply seems to have been absorbed by European CLO investors reasonably well, as liability spreads have tightened across the capital stack relative to end-2013 levels.”

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