Alcentra readies €413.5 million CLO; Volcker impacts primary; deal pipeline 'very full'

By Cristal Cody

Tupelo, Miss., Jan. 14 - At least two European collateralized loan obligation transactions are in the works to price in the near term, according to informed sources on Tuesday.

Alcentra Ltd. expects to sell €413.5 million of notes in the Jubilee CLO 2013-XI BV deal, according to an informed source.

The Carlyle Group LP plans to be in the European primary market with the Carlyle Global Market Strategies Euro CLO offering, estimated in the €350 million to €400 million area, a source said.

Nearly €8 billion of European CLO deals were priced in 2013, according to market sources. CLO managers are forecast to price €8 billion to €15 billion of deals in 2014.

In the U.S. primary market, CLO activity has stayed quiet so far in 2014 with market participants focused on the Volcker Rule, sources said.

"The pipeline is very full and some deals are getting marketed right now, but everyone's kind of hesitant given the pending Volcker ruling," a source said. "We need to get the ruling out of the way. Once that hits the tape, we'll probably see some deals attempt to get done starting next week."

About $12 billion of broadly syndicated deals are in the pipeline.

AAA-rated tranches of new top tier deals being marketed are talked to price around Libor plus 150 basis points, a source said.

Volcker update

Regulators provided additional clarification late on Tuesday on the Volcker Rule, which was announced on Dec. 10 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Federal agencies approved an interim rule to permit banks to retain interests in certain collateralized debt obligations backed primarily by trust preferred securities.

"The interim final rule also provides clarification that the relief relating to these TruPS CDOs extends to activities of the banking entity as a sponsor or trustee for these securitizations and that banking entities may continue to act as market makers in TruPS CDOs," the agencies said in a release.

The rule was approved by the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, Commodity Futures Trading Commission and the Securities and Exchange Commission.

The federal agencies will accept comment on the interim final rule for 30 days following publication in the Federal Register.

Alcentra preps CLO

Alcentra plans to place the €413.5 million Jubilee CLO 2013-XI CLO transaction via BofA Merrill Lynch, a source said.

Alcentra priced its first European CLO deal since 2008 in July when it brought the €400 million Jubilee CLO 2013-X BV deal.

The global asset management firm is a subsidiary of the Bank of New York Mellon Corp.

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