Onex, Regatta tap U.S. CLO market; PGIM prices €471.18 million CLO; spreads stable

By Cristal Cody

Eureka Springs, Ark., Sept. 26 – CLO issuance remains strong in September, while spreads are mostly unchanged in the secondary market, according to sources on Monday.

Details emerged on new CLO deals from Credit Suisse Asset Management, LLC, Onex Credit Partners, LLC, Regatta Loan Management LLC and PGIM Ltd.

Credit Suisse Asset Management sold $808.98 million of notes in the firm’s third CLO deal year to date.

Onex Credit Partners priced a $557.75 million CLO offering.

Regatta Loan Management LLC brought a $407.05 million deal to market.

PGIM priced €471.18 million notes in a European CLO transaction.

September CLO volume is $7.1 billion, 26% of which includes U.S. CLO refinancings, according to a J.P. Morgan Securities LLC note.

“So far this year there have been 17 CLO refinancings and resets,” JPMorgan analysts said in the note. “With spreads near post-crisis tights and looming risk retention in December, we expect CLO refinancing activity to remain elevated through to the end of the year.”

Primary and secondary activity was mostly light over the previous week with market participants at an industry conference.

In the U.S. secondary market, BWIC volume was about $210 million for the previous week, according to a BofA Merrill Lynch report.

CLO spreads were mostly unchanged across the capital stack with AAAs trading in the Libor plus 140 basis points area, the note said.

In the European CLO secondary market, AAAs were flat in the Euribor plus 125 bps area.

CSAM prices $808.98 million

Credit Suisse Asset Management sold $808.98 million of notes due Oct. 25, 2029 in the U.S. risk retention-compliant Madison Park Funding XXII Ltd. offering, according to a market source.

The CLO priced $516 million of class A floating-rate notes at Libor plus 148 bps at the top of the structure.

Wells Fargo Securities LLC was the placement agent.

The CLO manager or a majority owned affiliate is expected to retain at least 5% of each class of notes to comply with U.S. risk retention regulations.

Proceeds from the offering will be used to purchase a portfolio of about $800 million of mostly senior secured leveraged loans.

The CLO is backed primarily by first-lien senior secured loans.

Credit Suisse Asset Management has priced three U.S. CLOs year to date.

The unit of Credit Suisse Group AG priced four U.S. CLO deals and refinanced one vintage CLO transaction in 2015.

Onex prices $557.75 million

Onex Credit Partners priced $557.75 million of notes due Oct. 18, 2028 in its second CLO offering in 2016, according to a market source.

OCP CLO 2016-12 Ltd./OCP CLO 2016-12 Corp. placed $341 million of class A-1 senior secured floating-rate notes at Libor plus 157 bps in the senior tranche.

BofA Merrill Lynch was the placement agent.

The CLO has a two-year non-call period and a four-year reinvestment period.

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

Onex Credit Partners has priced two CLOs year to date and brought three CLOs to market in 2015.

The private equity firm is based in Toronto.

Regatta sells $407.05 million

Regatta Loan Management priced $407.05 million of notes due Sept. 20, 2028 in its CLO offering, according to a market source.

Regatta VII Funding Ltd./Regatta VII Funding LLC sold $206 million of class A-1 floating-rate notes (Aaa//AAA) at Libor plus 152 bps in the AAA-rated tranche.

BNP Paribas Securities Corp. was the placement agent.

The deal structure does not permit the purchase of bonds, letters of credit or other securities to comply with the Volcker Rule. Also, the CLO manager will retain the subordinated notes in an amount sufficient to meet the minimum risk retention requirements for markets in the United States and Europe.

The transaction is backed primarily by first-lien senior secured loans.

Proceeds from the offering will be used to purchase a portfolio of about $400 million of mostly senior secured leveraged loans.

Regatta Loan Management has priced two CLO deals year to date.

The investment firm is based in New York City.

PGIM sells €471.18 million

PGIM sold €471.18 million notes due Jan. 15, 2030 in the Dryden 46 Euro CLO BV transaction, according to a market source.

The CLO priced €236.5 million of class A-1 senior secured floating-rate notes (Aaa/AAA) at Euribor plus 118 bps at the top of the capital structure.

Barclays was the placement agent.

The notes have a non-call period ending Jan. 15, 2019 and a reinvestment period ending Jan. 15, 2021.

The deal is collateralized mainly by senior secured loans and bonds.

PGIM has priced two euro-denominated CLOs year to date.

The affiliate of Prudential Financial Inc. is based in London.

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