Tikehau sells €435.15 million CLO; Guggenheim reprices; BofA Merrill Lynch ups forecast

By Cristal Cody

Tupelo, Miss., Sept. 25 – The European CLO primary market is seeing deal action in September, while U.S. volume and a strong fourth-quarter supply are pushing volume forecasts to $100 billion for the year.

Tikehau Capital Europe Ltd. priced a €435.15 million transaction in the firm’s third CLO deal to date.

Guggenheim Partners Europe Ltd. repriced €112.7 million of notes in a step-up tranche from a 2015 CLO.

Also this month, Accunia Fondsmaeglerselskab A/S priced the previously reported €386.6 million Accunia European CLO II BV deal.

Euro-denominated CLO new issue, refinancing and reset volume totals more than €30 billion year to date, including €11.6 billion of new issuance, according to a BofA Merrill Lynch note released on Monday.

In U.S. primary action, Redding Ridge Asset Management, LLC priced the $501.58 million seven-part RR 2 Ltd./RR 2 LLC offering via BNP Paribas Securities Corp., a source said. Final pricing details were not immediately available.

The new deal market has been active in September following a heavy wave of refinancing and reset volume.

“With new-issue supply at $78 [billion], a robust 4Q17 pipeline and a strong desire among investors to put money to work, we believe our current forecast of $90 [billion] will be exceeded and revise our 2017 issuance forecast for U.S. CLOs to $100 [billion],” BofA Merrill Lynch analysts said in the note.

“The average pace of issuance through August has been about $8.7 [billion],” the analysts said. “Assuming this to continue until [year-end], we would see around $26 [billion] worth of new issue supply coming to the market. Judging from our conversations and what we are seeing in the pipeline, we expect the average pace to be sustainable until YE and into 2018.”

Tikehau CLO III prices

Tikehau Capital Europe sold €435.15 million of notes due Dec. 16, 2030 in the new euro-denominated CLO, according to market sources.

Tikehau CLO III BV priced €244.7 million of class A senior secured floating-rate notes at par to yield Euribor plus 87 basis points in the senior tranche.

Citigroup Global Markets Ltd. arranged the offering.

Tikehau has priced three CLOs to date, including one deal in 2016 and one deal in 2015.

The investment firm is based in London.

Guggenheim reprints CLO

Guggenheim Partners Europe repriced the €112.7 million tranche of class A-1B senior secured step-up floating-rate notes due Nov. 16, 2028 from a CLO first priced in 2015, according to a notice to noteholders on Monday.

In the original €406.5 million eight-tranche Cork Street CLO DAC deal priced in a private placement offering on Nov. 6, 2015, the CLO sold the step-up notes (Aaa//AAA) at Euribor plus 135 basis points. The notes stepped up to Euribor plus 195 bps after two years.

Final repricing details were not immediately available.

Guggenheim Partners Europe is a Dublin-based subsidiary of global asset manager Guggenheim Partners, LLC.

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