Two euro CLOs refinance for combined €939 million: Avoca CLO XVII and Dryden 48

Chicago, Sept. 9 – The euro refinancing market was active on Monday with two vintage CLOs pricing, while the domestic U.S. market stayed quiet.

Issuer Avoca CLO XVII DAC placed €521.23 million of notes due Oct. 15, 2032 through manager KKR Credit Advisors (Ireland) ULC.

And, PGIM, Inc., with Dryden 48 Euro CLO 2016 BV as issuer, priced €418 million of notes due Oct. 15, 2032.

Trace data for Friday showed that secondary trading remained relatively robust through the end of the week.

Investment-grade trading for CBO/CDO/CLOs on Friday was nearly identical to Thursday’s number, at $206.88 million with the average price at 99.1.

The non-investment grade sector slowed down at the end of the week, with volume at $61.97 million. The average price was 74.3.

First week of September

The secondary market for collateralized loan obligation bonds, more specifically, in the first week of September saw $338 million in for the bid, according to BofA Merrill Lynch analysts.

Most of that was in AAAs, As, BBs and equity.

CLO AAAs were flat on the week Friday at an average Libor plus 117 bps area in the secondary market.

According to BofA, “real money interests have only started to return to the lower part of the CLO debt stack.”

Avoca CLO refinances

As in many recent refinancings, the Avoca CLO XVII portfolio added class X notes to the capital structure at the top.

The CLO has a 4.5-year reinvestment period and an 8.5-year weighted average life with a final maturity in 2032.

The average credit quality of the obligors is in the B category.

The coupons for all classes of notes in this portfolio were still to be determined.

Dryden 48 in 11 parts

The deal brought by PGIM was roughly in line with other recently priced CLOs, according to Kroll Bond Rating Agency.

The deal is backed by 158 issuers with a top five obligor concentration of 10.41%.

The K-WARF rating is 2495, and the average credit quality is B, according to Kroll.

In the transaction, 90% of the portfolio needs to be secured senior obligations. A maximum of 35% is allowed to be covenant-lite.

The reinvestment period runs through April 15, 2024 and comes with two years of call protection.

The top sector in the portfolio at 20.27% is chemicals, containers, metals and materials.

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