Blackstone/GSO prices €343.92 million; Palmer Square plans euro CLO; secondary strong

By Cristal Cody

Tupelo, Miss., Aug. 21 – Blackstone/GSO Debt Funds Management Europe Ltd. priced €343.92 million of notes in the manager’s third euro-denominated CLO offering of the year.

Meanwhile, Palmer Square Europe Capital Management LLC plans to price a €198.7 million debut European static CLO transaction.

Also on Friday, Palmer Square Capital Management LLC closed on its previously reported $395.9 million Palmer Square CLO 2020-2 Ltd./Palmer Square CLO 2020-2, LLC broadly syndicated deal.

The CLO priced $244 million of the class A-1a floating-rate notes at Libor plus 170 basis points.

In addition, Wellfleet Credit Partners, LLC closed Friday on its $396 million Wellfleet CLO 2020-2, Ltd./Wellfleet CLO 2020-2, LLC offering, which placed $240 million of the class A floating-rate notes at Libor plus 185 bps.

More than €13 billion of euro-denominated CLOs have priced year to date, while dollar-denominated supply totals about $45 billion year to date, according to market sources.

Another $26 billion of vintage CLOs have been refinanced year to date.

In other activity, leveraged loan funds saw $384.8 million of outflows for the past week ended Wednesday, up from $238 million in the prior week, Fitch Ratings said. Year-to-date redemptions total $18.87 billion.

High-grade volume heavy

Elsewhere, the secondary market continued to see heavy trading volume this week, according to Trace data.

On Thursday, $864.05 million of high-grade CBO/CDO/CLO notes and $171.66 million of lower-rated paper was traded.

Prices averaged 97.70 for the investment-grade issues and 86.10 for CBO/CDO/CLO notes further down the capital structure.

High-grade secondary market volume topped $1.14 billion on Wednesday with issues traded at an average 97.90.

Lower-rated secondary market volume totaled $364.16 billion over the day with paper at an average 87.50.

High-grade secondary market volume also totaled $1.4 billion on Tuesday with paper traded at an average 98.30, while non-high-grade supply totaled $260.94 million at an average 79.70.

On Monday, $400.83 million of high-grade CBO/CDO/CLO paper was traded at an average 98.50, along with $110.47 million of lower-rated notes that traded at an 83.40 average price.

Blackstone/GSO brings CLO

Blackstone/GSO Debt Funds Management Europe priced €343.92 million of notes due April 15, 2033 in the CLO offering, according to market sources on Friday.

Deer Park CLO DAC sold €204.75 million of class A-1 floating-rate notes at Euribor plus 145 bps at the top of the capital stack.

Deutsche Bank AG was the placement agent.

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

Blackstone/GSO has priced three euro-denominated CLOs year to date.

The Dublin-based manager is an affiliate of Blackstone Group LP and GSO Capital Partners LP.

Palmer Square details

Palmer Square Europe Capital Management plans to price €198.7 million of notes due Jan. 15, 2030 in the company’s first European static CLO transaction, according to a market source.

The Palmer Square European Loan Funding CLO 2020-1 DAC deal includes €129 million of class A floating-rate notes (AAA), €18.4 million of class B floating-rate notes (AA), €14.5 million of class C floating-rate notes (A), €11 million of class D floating-rate notes (BBB-), €8.3 million of class E floating-rate notes (BB-), €3.2 million of class F floating-rate notes (B-) and $14.3 million of subordinated notes.

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

Palmer Square Europe is a new London-based affiliate of Palmer Square Capital, an investment management firm based in Leawood, Kan., that has priced four dollar-denominated broadly syndicated CLOs and one vintage refinancing transaction year to date.

Palmer Square announced the London office addition in July.

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