Oak Hill taps Europe; Prudential refinances $473.5 million CLO; refinancings ‘attractive’

By Cristal Cody

Tupelo, Miss., May 4 – New CLO issuance in Europe includes a €385.1 million deal from Oak Hill Advisors (Europe), LLP, while refinancing activity continues in the U.S. market, according to sources.

Prudential Investment Management, Inc. refinanced $473.5 million of notes in a vintage 2012 CLO deal.

The senior tranches priced at tighter spreads than where the notes first priced, while the class E and class F notes were refinanced at wider spreads than the original issuance.

“We believe that refinanced CLO debt, single-As in particular, offer relative value to new issue given the limited spread basis, shorter WAL, and Volcker-compliance typifying most refinancings,” J.P. Morgan Securities LLC analysts said in a note.

Prudential’s “single-A refinanced tranche priced at par with L+270 bp coupon versus a recently issued tranche from the same manager, also priced at par at L+290 [bps],” the analysts said. “Such trades should be attractive to a number of investors, even banks going down the credit curve.”

Oak Hill Advisors (Europe) priced €385.1 million of notes due June 15, 2028 in a euro-denominated CLO offering, according to a market source.

Oak Hill European Credit Partners III Ltd. sold €201.1 million of class A-1 senior secured floating-rate notes at Euribor plus 130 basis points in the senior slice.

Goldman Sachs & Co. arranged the transaction.

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