Blackstone/GSO in market; BlackRock preps CLO; global CLO performance forecast strong

By Cristal Cody

Tupelo, Miss., Dec. 2 – CLO primary activity remains steady, with one new U.S. deal added to the pipeline and another expected to price in the European market, according to market sources on Wednesday.

Blackstone/GSO Debt Funds Management Europe Ltd. was expected to price €414 million of notes in the Tymon Park CLO Ltd. transaction via BofA Merrill Lynch, a source said. Final pricing details were not available by press time.

Coming up in the U.S. primary market, BlackRock Financial Management, Inc. is marketing $506.5 million of notes in the firm’s fourth CLO deal of the year.

Notes in the Magnetite XVI, Ltd./Magnetite XVI LLC CLO offering will include $320 million of class A floating-rate notes (//AAA); $60 million of class B floating-rate notes; $11,579,000 of class C-1 floating-rate notes; $18,171,000 of class C-2 floating-rate notes; $25.25 million of class D floating-rate notes; $25 million of class E floating-rate notes and $46.5 million of subordinated notes.

CLO credit performance is expected to remain strong in 2016, Moody’s Investors Service said in a news release on Wednesday.

“U.S. CLOs will perform well next year, with loan defaults rising slightly but remaining low overall due to tighter underwriting standards,” Moody’s senior vice president Algis Remeza said in the release. “And most European transactions will be able to absorb an increase in defaults due to embedded structural protections, despite declining underwriting standards in that region.”

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