'Robust' calendar likely in second half of year; Brigade prices; CVC to sell European CLO

By Cristal Cody

Tupelo, Miss., Aug. 28 - Brigade Capital Management, LLC priced the top AAA-rated tranche in its $416.5 million CLO offering at Libor plus 140 basis points and bottom tranche at Libor plus 575 bps, according to informed sources on Wednesday.

Triple A-rated tranches have priced on average in August at Libor plus 133 bps to Libor plus 140 bps, according to a market source.

CLO issuance stands at more than $51 billion year to date with about $60 billion to $70 billion total predicted for the year.

Primary activity is expected to heat up in September after the Labor Day holiday, sources report.

"Robust CLO formation in the second half of the year" is expected, Morgan Stanley & Co. LLC analysts said in a note.

"We remain constructive in our expectations for U.S. CLO new issues for 2013," the analysts said.

New European CLO issuance also is on the way with a transaction in the pipeline from CVC Credit Partners, LLC, according to an informed source. Three new European CLOs priced in August with total European CLO issuance year to date at about €4 billion.

Brigade raises $416.5 million

Additional details emerged for the previously reported $416.5 million of notes due Oct. 22, 2025 that New York City-based Brigade Capital Management brought, according to market sources.

The Battalion CLO IV Ltd./Battalion CLO IV LLC sold $241 million of class A-1 senior secured floating-rate notes (Aaa/AAA/) at Libor plus 140 bps; $50 million of class A-2 senior secured floating-rate notes (/AA/) at Libor plus 200 bps; $35 million of class B senior secured deferrable floating-rate notes (/A/) at Libor plus 300 bps; $22 million of class C senior secured deferrable floating-rate notes (/BBB/) at Libor plus 335 bps; $19 million of class D secured deferrable floating-rate notes (/B/) at Libor plus 460 bps; $11 million of class E secured deferrable floating-rate notes (/B/) at Libor plus 575 bps and $38.5 million of subordinated notes.

BofA Merrill Lynch was the underwriter.

Brigade Capital Management will manage the CLO, which is backed primarily by broadly syndicated first-lien senior secured corporate loans.

CVC plans European CLO

CVC Credit Partners is prepping to bring a European CLO deal via Goldman Sachs & Co., an informed source said.

CVC Credit Partners has brought three U.S. CLO deals in the past year, including the $413 million Apidos CLO XI LLC offering that closed in January, the $523 million Apidos CLO XII LLC deal completed in April and the $617.36 million Apidos CLO XIV LLC transaction that settled in June.

CVC Credit Partners is a New York City-based subsidiary of London-based private equity firm CVC Capital Partners Ltd.

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