Blackstone/GSO sells €558.05 million CLO; OCP, Golub tap market; secondary spreads firm

By Cristal Cody

Eureka Springs, Ark., April 27 – CLO primary issuance continues to heat up with new deals priced in Europe and the U.S. markets, sources said on Wednesday.

Blackstone/GSO Debt Funds Management Europe Ltd. sold €558 million of notes in the Elm Park CLO Designated Activity Co. deal on Wednesday.

Deutsche Bank AG, London Branch is the placement agent. Final pricing details were not available by press time.

Onex Credit Partners, LLC priced $501.6 million of notes due May 15, 2028 in a new CLO offering.

In the U.S. middle-market space, GC Investment Management LLC placed a $354,288,000 deal.

In other new issuance, Zais Group LLC sold a $281 million static CLO, Zais CLO 4 Ltd./Zais CLO 4 LLC, via RBC Capital Markets LLC. Final deal details were not disclosed.

Also, Sound Point Capital Management LP priced the $513 million Sound Point CLO XI, Ltd./Sound Point CLO XI Inc. transaction via Credit Suisse Securities (USA) LLC.

In addition, Prudential Investment Management, Inc. brought $402 million of notes in the Dryden 42 Senior Loan Fund/Dryden 42 Senior Loan Fund LLC transaction. BNP Paribas Securities Corp. was the placement agent. Final pricing details were not available by press time.

“Static CLOs have staged somewhat of a comeback over the last few weeks as three such deals have priced recently,” Deutsche Bank Securities Inc. analyst Bjarni Torfason said in a note on Wednesday. “Two came in mid-March and the third priced mid last week.”

New issue and secondary spreads continue to improve, he said.

“In the secondary market we continue to see spreads tightening across the mezzanine,” he said. “With new deals bringing more frequent new issue color, the tightening is also very visible in the new issue market across the capital stack. At the AAA level we are seeing more deals print at tight levels and the AA, single A and BB rated tranches of Prudential’s Dryden 42 printed at the tightest levels that any deal has reached this year at each respective rating level.”

Onex brings 2016-11 CLO

Onex Credit Partners priced $501.6 million of notes due May 15, 2028 in a new CLO offering, a market source said.

The OCP 2016-11 Ltd./OCP CLO 2016-11 Corp. vehicle sold $310 million of class A-1 floating-rate notes at a discount margin of Libor plus 159 basis points in the senior tranche.

Citigroup Global Markets Inc. arranged the offering.

Onex Credit Partners will manage the CLO.

The CLO is non-callable until May 15, 2017. The reinvestment period ends May 15, 2018.

The deal is backed primarily by broadly syndicated senior secured corporate loans.

Onex Credit Partners, a Toronto-based private equity firm, priced three CLO deals in 2015.

Golub CLO prices

GC Investment Management sold $354,288,000 of notes due May 5, 2028 in the offering via Wells Fargo Securities LLC, according to a market source.

Golub Capital Partners CLO 31(M) Ltd./Golub Capital Partners CLO 31(M) LLC priced $192.5 million of class A floating-rate notes (AAA) at a discount margin of Libor plus 220 bps at the top of the capital structure.

The CLO has a non-call period that ends May 5, 2018. The reinvestment period ends May 5, 2020.

The deal is backed primarily by middle-market senior secured loans.

GC Investment Management, an affiliate of New York-based middle market lender Golub Capital, priced two CLOs in 2015.

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