Blackstone/GSO taps market with €415 million CLO; NXT attracts first-time CLO investors

By Cristal Cody

Tupelo, Miss., May 14 – Blackstone/GSO Debt Funds Management Europe Ltd. brought its second euro-denominated CLO deal of the year, according to a market source on Thursday.

Blackstone/GSO priced a €415 million offering.

In the U.S. market, NXT Capital, LLC closed on the $408.6 million NXT Capital CLO 2015-1, LLC middle market-backed deal that priced on April 23, according to the company and a market source.

NXT sold six tranches of securities due April 2027 rated AAA through BB and retained the $56.6 million equity interest.

“Seven of the investors purchasing securities in this CLO were first-time investors in NXT Capital’s CLO platform,” NXT said in a release.

Wells Fargo Securities, LLC was the lead manager, and BMO Capital Markets GKST Inc. was co-lead manager.

NXT Capital Investment Advisors, LLC manages the CLO.

The CLO is secured almost exclusively by middle market senior secured loans originated by NXT.

“NXT has been one of the most consistent issuers of middle market CLOs and closing this latest transaction brings our total issuance above $1.4 billion,” NXT chief financial officer Neil Rudd said in the release.

The Chicago-based firm, which has priced four CLOs over the last four years, provides structured financing solutions through its corporate finance, equipment finance and real estate finance groups.

In other activity, Fitch Ratings said in a report on Thursday that the performance of U.S. CLOs remained stable in the first quarter.

“Only one newly defaulted name, Quicksilver Resources, was held by one CLO at the end of the quarter,” Fitch said in its U.S. CLO index report. “While several leveraged energy issuers filed for bankruptcy or initiated debt restructuring in the beginning of the second quarter, CLOs tracked by the index are minimally impacted.”

The index added 41 new CLOs that became effective in the first quarter with 124 CLOs included in the index at the end of the quarter.

Blackstone/GSO prices CLO

Blackstone/GSO Debt Funds Management Europe priced €415 million of notes due June 7, 2029 in the Orwell Park CLO Ltd. transaction, according to a market source.

The CLO sold €243 million of class A-1 senior secured floating-rate notes at Euribor plus 130 basis points at the top of the capital structure.

BNP Paribas, London Branch arranged the deal.

Blackstone/GSO will manage the CLO.

The CLO is secured primarily by secured senior obligations or senior secured notes.

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

Blackstone/GSO Debt Funds Management Europe previously was in the primary market on Feb. 18 with the €411.1 million Dartry Park CLO Ltd. deal.

The Dublin-based subsidiary of asset manager GSO Capital Partners LP priced four euro-denominated CLOs in 2014.

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