Five Arrows sells €307.8 million CLO; BBs ‘grind tighter’; Credit Suisse cuts CLO positions

By Cristal Cody

Eureka Springs, Ark., March 23 – March primary activity continues to rise in the European and U.S. CLO deal markets.

Five Arrows Managers LLP tapped the European primary market with a €307.8 million CLO offering.

CreekSource LLC priced $303 million of notes due April 15, 2028 in the Mill Creek CLO II, Ltd./Mill Creek CLO II LLC transaction, a source said. Goldman Sachs & Co. was the placement agent. Final pricing details were not available by press time.

“New CLO issuance keeps building momentum,” Bjarni Torfason, Deutsche Bank Securities Inc. analyst, said in a note on Wednesday.

“Last week two deals priced and this week we have already seen one deal price,” he said. “That brings March issuance to seven deals worth $2.8 billion. That is already beating February and a number of deals are being marketed. In the primary market we are seeing firming of BBB and BB levels and in the secondary market BBs have continued to grind tighter.”

BB-rated notes were quoted trading in the 850 basis points to 1,250 bps over Libor area.

In other market activity, Credit Suisse Group AG announced that it has accelerated its restructuring to stem quarterly losses, which includes exiting distressed credit and European securitized trading.

Credit Suisse chief executive officer Tidjane Thiam said in a press release that the company also cut its U.S. CLO positions to $300 million from $800 million, with gross write-downs of $64 million to date.

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