CVC prices €289.5 million CLO; dollar, euro supply remains thin; CLO spreads improve

By Cristal Cody

Tupelo, Miss., June 2 – CVC Credit Partners Group Ltd. priced a €289.5 million CLO in the manager’s first euro-denominated offering of 2020.

The CVC Cordatus Loan Fund XVII DAC broadly syndicated CLO included a €163.45 million AAA-rated tranche of class A senior secured floating-rate notes at Euribor plus 195 bps.

CVC last tapped the European primary market in November.

Euro CLO supply, along with dollar-denominated volume, remains light since the pandemic volatility began in March.

Dollar-denominated issuance is down 50% year over year, though volume is increasing with supply up 54% in May from April, according to a Wells Fargo Securities LLC research note on Tuesday.

Year to date, about $27 billion of broadly syndicated dollar-denominated CLOs have priced, down from the $54 billion of issuance posted in the same period a year ago, Wells Fargo analysts said in the report.

Euro-denominated CLO volume totals more than €7 billion year to date, down 36% from the same period last year.

CLO AAA primary spreads ended May at a Libor plus 170 basis points average, the Wells Fargo analysts said.

AAA spreads were 20 bps tighter from April’s average and better than the 235 bps averaged in March but still off the tights of the year seen in February at a Libor plus 125 bps average.

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