KKR offers €405.9 million notes, manager’s first euro CLO of year; thin euro supply eyed

By Cristal Cody

Tupelo, Miss., March 19 – KKR Credit Advisors (Ireland) Unlimited Co. plans to price a €405.9 million CLO in the manager’s first euro-denominated transaction of the year.

About €5 billion of European CLOs have priced year to date, while other transactions are in the deal pipeline, according to market sources.

About €22 billion of euro-denominated CLO supply is expected this year, down from €27 billion of CLOs priced in 2018, according to a Wells Fargo Securities, LLC report.

Euro CLO AAA-rated tranches have priced in the Euribor plus 97 basis points to Euribor plus 116 bps range year to date, according to market sources.

Last week, Hayfin Capital Management LLC sold €407.9 million of notes in the Hayfin Emerald CLO II DAC deal and placed the €148 million tranche of class A-1 senior secured floating-rate notes at par to yield Euribor plus 116 bps.

In its deal, KKR Credit Advisors (Ireland) is offering €405.9 million of notes due July 15, 2032 in the Avoca CLO XX DAC transaction, according to a market source.

The deal includes €2 million of class X senior secured floating-rate notes (Aaa//AAA), €238 million of class A-1 senior secured floating-rate notes (Aaa//AAA) and €10 million of class A-2 senior secured floating-rate notes (Aaa//AAA) at the top of the capital stack.

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