Ares plans €410.2 million CLO; new U.S. volume, reset supply thin; outflows continue

By Cristal Cody

Tupelo, Miss., Feb. 22 – Ares European Loan Management LLP is expected price a €410.2 million CLO as the primary market continues to pick up steam.

Several European CLOs have priced in February, while others are in the deal pipeline.

As previously reported, Redding Ridge Asset Management (UK) LLP plans to price a debut €401.4 million CLO, RRE 1 Loan Management DAC, in a transaction via BNP Paribas Securities Corp.

U.S. CLO supply also is active but softer compared to the same period last year.

“New CLO issuance picked up in February compared with January, but YTD volumes are well under last year’s levels,” Fitch Ratings said in a report on Friday. “Seventeen BSL CLOs priced in February, following 10 in January. This compares with an unusually high January 2018 when 13 BSL CLOs priced followed by 25 more in February 2018.”

CLO spreads have continued to widen this year with new senior spreads averaging at Libor plus 127 basis points, compared with Libor plus 121 bps for CLOs that were issued in December, according to the report.

“Resets are also thin so far this year,” Fitch said.

In other market activity, outflows from leveraged loans worsened to $770 million for the week ended Feb. 20 after losing $460 million in redemptions a week earlier, according to a BofA Merrill Lynch report released on Friday.

Ares to price CLO XI

Ares European Loan Management plans to price €410.2 million of notes due April 15, 2032 in the Ares European CLO XI BV offering, according to a market source.

The transaction includes €2 million of class X senior secured floating-rate notes (Aaa//AAA), €240 million of class A-1 senior secured floating-rate notes (Aaa//AAA), €7 million of class A-2 floating-rate notes (Aaa//AAA), €19 million of class B-1 senior secured floating-rate notes (Aa2//AA) and €20 million of class B-2-R senior secured fixed-rate notes (Aa2//AA).

The offering also includes €21 million of class C senior secured deferrable floating-rate notes (A2//A); €28.5 million of class D senior secured deferrable floating-rate notes (Baa3//BBB-); €24.5 million of class E senior secured deferrable floating-rate notes (Ba3//BB-); €9.5 million of class F senior secured deferrable floating-rate notes (B3//B-) and €38.7 million of subordinated notes.

Citigroup Global Markets Ltd. is the placement agent.

Ares is an asset management firm based in London.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.