PGIM eyes reopening Dryden 39 Euro CLO to issue subordinated notes; secondary thins

By Cristal Cody

Tupelo, Miss., Sept. 15 – The European CLO market is showing signs of activity after a primary lull over the past few weeks.

PGIM Ltd. may reopen its €415.7 million Dryden 39 Euro CLO 2015 BV transaction to price additional subordinated notes.

In other activity, CIFC LLC said in a news release on Thursday that it plans to partner with the Healthcare of Ontario Pension Plan to form CIFC CLO Strategic Partners II, a new capitalized manager-owned affiliate of CIFC.

CMOA II intends to purchase the majority equity positions of CIFC’s future new issue CLOs to comply with U.S. and E.U. risk retention rules.

CIFC said in the release it has issued a total of $2.9 billion in new CLOs. CMOA II is expected to support about $7.5 billion of CIFC’s new issuance over the next several years.

In the firm’s most recent deal priced in August, affiliate CIFC Asset Management LLC sold the $814.41 million CIFC Funding 2017-IV Ltd./CIFC Funding 2017-IV LLC transaction.

The New York-based credit manager has priced four new CLOs and refinanced three vintage CLOs year to date.

About $63 billion of new U.S. CLOs and more than €10 billion of new euro CLOs have priced year to date, according to market sources.

Elsewhere, secondary market volume thinned over the week.

On Thursday $82.81 million of investment-grade CBO/CDO/CLO issues and $119.49 million of non-investment-grade securities traded, Trace reported.

Trading volume on Wednesday totaled $75.57 million in the high-grade tranches and $127.92 million in the lower-rated securities.

During Tuesday’s session, $182.34 million of high-grade issues and $176.7 million of non-investment-grade securities traded, while on Monday, $30.24 million of high-grade issues and $75 million of non-investment-grade securities were traded.

PGIM mulls reopening

PGIM is considering issuing additional subordinated notes in its vintage €415.7 million Dryden 39 Euro CLO 2015 transaction, according to a notice of potential additional issuance on Friday.

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

In the original €415.2 million 10-tranche transaction that settled on Sept. 9, 2015, the CLO issued €42.5 million of subordinated notes due Oct. 15, 2029.

PGIM has priced three new European CLOs and refinanced two vintage euro-denominated CLOs year to date.

In 2016, PGIM priced two euro-denominated CLOs and refinanced one vintage CLO.

The investment management firm is part of Newark, N.J.-based Prudential Financial Inc.

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