CVC prices $409 million; Golub sells middle-market CLO; Deutsche ups 2016 CLO forecast

By Cristal Cody

Eureka Springs, Ark., July 27 – CLO deal action remains strong in July with more than $5 billion priced in new and refinanced transactions month to date, including a new offering from CVC Credit Partners, LLC, according to market sources and Prospect News data.

CVC Credit Partners priced a $409 million CLO in the firm’s first U.S. deal of the year.

In the middle-market CLO space, GC Advisors LLC sold $410 million of notes due Aug. 8, 2028 in the Golub Capital Investment Corp. CLO 2016(M) LLC transaction via Wells Fargo Securities LLC.

The CLO manager, managed by New York-based middle market lender Golub Capital, priced $220 million of class A floating-rate notes (/AAA/) at a discount margin of Libor plus 215 basis points at the top of the capital structure, according to a market source. Final pricing details were not available by press time.

More than $32 billion of CLOs have priced year to date, according to Prospect News data.

The deal pace has been steady since spring, prompting Deutsche Bank Securities Inc. to raise its 2016 volume forecast to $60 billion.

“After the poor start to the year we lowered our full year issuance forecast from our original $70 billion projection to $45-50 billion,” Bjarni Torfason, a Deutsche Bank Securities Inc. analyst, said in a note on Wednesday. “Given the improved conditions and increased issuance in the first half we are now raising the projection to $60 billion. With $26 billion issued in the first half of the year this would mean an average monthly issuance of just under $6 billion. The U.S. risk retention rule is set to come into effect on Dec. 24 and that could create a rush to issue more deals before that.”

BofA Merrill Lynch analysts also raised their CLO volume forecast to as much as $60 billion for the year from a revised $45 billion of deal volume expected.

New issue CLO spreads have continued to tighten over the month, Torfason said.

AAA spreads on recently priced deals in July have ranged from Libor plus 151 bps to 155 bps, according to the note.

“The last time a AAA tranche of a new issue deal priced tighter was last December,” Torfason said. “Although AAA spreads have been tightening, they are still on the wider side of the range they have been in over the last three years.”

CVC prices $409 million

CVC Credit Partners priced $409 million of notes due July 20, 2027 in the CLO deal via BofA Merrill Lynch, according to a market source.

Apidos CLO XXIV/Apidos CLO XXIV LLC sold $248 million of class A-1 senior secured floating-rate notes at a discount margin of Libor plus 151 bps in the AAA-rated tranche.

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

CVC Credit Partners previously priced three CLO deals and one CLO refinancing transaction in 2015.

The subsidiary of London-based CVC Capital Partners Ltd. is based in New York City.

© 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.