KKR raises €516.1 million; Oak Hill adds fixed/floating-rate notes; Garrison prices CLO

By Cristal Cody

Tupelo, Miss., May 18 – European CLO issuance year to date climbed to more than €6 billion following a deal from KKR Credit Advisors (Ireland), according to market sources and data compiled by Prospect News.

KKR Credit Advisors (Ireland) priced a €516.1 million CLO.

Also in Europe, Oak Hill Advisors (Europe), LLP brought a total of €416.7 million of notes in an upsized offering.

In the previous week, Blackstone/GSO Debt Funds Management Europe Ltd. priced the €415 million Orwell Park CLO Ltd. deal.

In new U.S. primary action, Garrison Investment Group, LP brought a $413.7 million CLO.

U.S. managers have priced more than $46 billion of CLOs year to date, data shows.

In the secondary market, U.S. CLO BB-rated spreads remain strong and tightened 15 basis points to the Libor plus 625 bps area over the previous week, according to a BofA Merrill Lynch report. BB-rated notes have come in 80 bps year to date.

AAAs improved 2 bps over the week to the Libor plus 145 bps area. AAA-rated notes have tightened 18 bps year to date, the note said.

“Secondary activity picked up meaningfully in the U.S. with BWIC volumes totaling $1.2 billion concentrated largely in post-crisis deals,” BofA Merrill Lynch analysts said in the report. “Triple-As comprised the largest share among 2.0 line items. With primary issuance having slowed down from April, spread levels tightened across the entire 2.0 capital stack.”

Trading volumes also picked up in Europe over the previous week, with about €110 million appearing on BWIC lists, the report said.

KKR prices €516.1 million

KKR Credit Advisors (Ireland) sold €516.1 million of notes due July 12, 2028 in the Avoca CLO XIV Ltd. deal, according to a market source.

The CLO priced €292.5 million of the class A senior secured floating-rate notes at Euribor plus 130 bps at the top of the capital structure.

Morgan Stanley & Co. International plc was the placement agent.

KKR Credit Advisors will manage the CLO.

The CLO is backed primarily by senior secured loans or senior secured bonds.

KKR Credit Advisors (Ireland) brought three euro-denominated CLO deals in 2014, including the €414 million Avoca CLO XIII Ltd. transaction in November.

The credit investment management firm is based in Dublin.

Oak Hill Advisors upsizes

Oak Hill Advisors (Europe) sold €416.7 million of notes due June 15, 2028 in an offering upsized from €385.1 million, according to a market source.

Oak Hill European Credit Partners III Ltd. priced €201.1 million of class A-1 senior secured floating-rate notes at Euribor plus 130 bps in the senior tranche. The CLO added a €31.6 million tranche of 1.52% class A-3 senior secured fixed/floating-rate notes, which convert to a floating-rate of Euribor plus 130 bps after five years.

Goldman Sachs International arranged the transaction.

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

Proceeds from the transaction will be used to purchase a €400 million portfolio of European leveraged loans and bonds.

Oak Hill Advisors (Europe) is a credit manager based in London.

Garrison prices CLO

In U.S. pricing action, Garrison Investment Group sold $413.7 million of notes due May 25, 2027 in the Garrison Funding 2015-1 Ltd./Garrison Funding 2015-1 LLC deal, according to a market source.

The CLO priced $248 million of class A-1 floating-rate notes at Libor plus 145 bps in the AAA-rated slice.

J.P. Morgan Securities LLC was the placement agent.

Garrison Funding 2015-1 Manager LLC will manage the CLO.

The CLO has a two-year non-call period and a four-year reinvestment period.

The deal is backed primarily by first-lien senior secured corporate loans.

Proceeds from the offering will be used to purchase a portfolio of about $400 million of mainly senior secured leveraged loans.

Garrison Investment is a New York City-based middle market credit and asset investment firm.

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