Napier Park, Blackstone/GSO price CLOs; leveraged loans post inflows; secondary active

By Cristal Cody

Tupelo, Miss., May 29 – Two CLO managers tapped the European primary market with new deals.

Napier Park Global Capital Ltd. priced €201.75 million of notes in the manager’s first European CLO offering of the year.

Blackstone/GSO Debt Funds Management Europe Ltd. priced a €282.5 million CLO in its third euro-denominated deal brought to the market year to date.

More than €7 billion of euro-denominated CLOs have priced so far this year, market sources report.

New issue and refinancing broadly syndicated CLO volume year to date totals $55.24 billion, which includes $46.96 billion of dollar-denominated CLO notes, according to Prospect News data.

European supply picked up in May after volume came to a halt in March on the Covid-19 pandemic impact.

The first quarter saw fewer new European broadly syndicated CLOs rated by Moody’s Investors Service, the agency noted in its May CLO market report.

“We rated six BSL CLOs that closed in the first quarter with a total par of €2.38 billion, down significantly from 25 BSL CLOs with a total par of €9.94 billion in Q4 2019,” Moody’s said.

Fitch Ratings said in a report on Friday that a “large majority of EMEA sub-investment-grade CLO tranches” are now on rating watch negative or negative outlook, while the notional amount affected by negative rating actions remains fairly small.

BB- and B-rated tranches make up the most tranches impacted but represent only 6.5% and 3% of rated notes, respectively, Fitch said.

The proportion of tranches on negative outlook or rating watch negative is only 2% and 6%, respectively, by euro volume, according to the report.

“Downgrades on EMEA CLOs have so far been limited to a few sub-investment-grade tranches,” Fitch said.

Meanwhile, leveraged loans “got the first weekly inflow since the beginning of January” for the past week ended Wednesday, BofA Securities, Inc. credit strategist Yunyi Zhang said in a note released Friday.

Inflows totaled $10 million versus a $490 million outflow in the prior week.

Looking at the securitized secondary market, trading volume climbed to $793.05 million in high-grade CBO/CDO/CLO paper on Thursday from $679.77 million of supply on Wednesday and $318.28 million on Tuesday, Trace data shows.

The securities were seen at a 94.60 average in the previous session versus 95.50 on Wednesday and 94.30 on Tuesday.

Secondary trading volume in lower-rated securities totaled $136.49 million on Thursday, compared to $160.09 million on Wednesday and $92.55 million at the start of the holiday-shortened week on Tuesday.

Average prices for non-high-grade paper traded at 73.30 during the session, compared to 74.70 on Wednesday and 69.30 on Tuesday.

Napier Park sells Henley CLO

Napier Park Global Capital sold €201.75 million of notes due Dec. 15, 2032 in the new deal, according to market sources.

Henley CLO II DAC sold €108 million of class A floating-rate notes at Euribor plus 174 basis points in the AAA-rated tranche.

The deal is backed primarily by broadly syndicated senior secured loans and bonds.

The CLO manager priced one euro-denominated CLO in 2019.

Napier Park Global Capital is an asset management firm based in New York.

Blackstone/GSO prices

Blackstone/GSO Debt Funds Management Europe priced €282.5 million of notes due July 20, 2033 in its CLO offering, according to market sources.

Avondale Park CLO DAC sold €159 million of class A-1A floating-rate notes at Euribor plus 170 bps at the top of the capital structure.

The broadly syndicated CLO is backed primarily by euro-denominated secured senior loans and bonds.

Blackstone/GSO is a Dublin-based manager and affiliate of Blackstone Group LP.

© 2015 Prospect News.
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