BlackRock in deal pipeline with €413.5 million CLO; Monroe sees strong demand for CLO

By Cristal Cody

Tupelo, Miss., March 20 – The European CLO primary market is expected to see more activity in new issuance and refinancings, sources report.

BlackRock Investment Management (UK) Ltd. is marketing a new €413.5 million transaction.

European CLO refinancing and reset deal activity is expected to pick up in the coming weeks after thin issuance since February, according to a BofA Merrill Lynch research note.

In other activity, Monroe Capital LLC announced in a release on Tuesday that it closed on its previously reported $456.3 million middle-market CLO transaction. The Monroe Capital MML CLO VI, Ltd./Monroe Capital MML CLO VI, LLC deal had priced the $252 million tranche of class A floating-rate notes at Libor plus 145 basis points.

Deutsche Bank Securities Inc. arranged the Rule 144A and Regulation S transaction.

The deal saw “strong demand,” Jeremy VanDerMeid, managing director of Monroe, said in the release.

Monroe Capital said the term financing was its second CLO completed in the last 12 months and is secured by a portfolio of middle-market senior secured loans.

The firm and its affiliates retained a majority of the subordinated notes in the deal, which was structured to comply with U.S. and European risk retention guidelines.

“Our investor base continues to expand in the U.S., Europe and Asia,” Ted Koenig, president and chief executive officer of Monroe, said in the press release. “We are pleased to count many of our existing CLO investors in this transaction as well as several new investors.”

Monroe Capital is a middle-market lender and private credit asset management firm based in Chicago.

BlackRock offers new CLO

BlackRock Investment Management (UK) plans to price €413.5 million of notes due 2031 in the new BlackRock European CLO V DAC transaction, according to market sources.

The deal includes €216 million of class A-1 senior secured floating-rate notes (Aaa//AAA); €32 million of class A-2 senior secured fixed-rate notes (Aaa//AAA); €42 million of class B senior secured floating-rate notes (Aa2//AA); $24 million of class C senior secured deferrable floating-rate notes (A2//A); €21 million of class D senior secured deferrable floating-rate notes (Baa2//BBB); €25 million of class E senior secured deferrable floating-rate notes (Ba2//BB); €12 million of class F senior secured deferrable floating-rate notes (B2//B-) and €41.5 million of subordinated notes.

BofA Merrill Lynch is the placement agent.

Earlier in March, BlackRock Investment Management (UK) closed on the €474 million refinancing of the vintage 2016 BlackRock European CLO I DAC transaction.

The investment management firm is a London-based subsidiary of BlackRock, Inc.

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