Cairn prices €362.57 million CLO; CELF refinances €277.6 million; capital stack ‘well bid’

By Cristal Cody

Eureka Springs, Ark., Dec. 19 – CLO primary and refinancing action has remained heavy in December, but activity is expected to slow heading into the final two weeks of the year, according to sources on Monday.

“Global CLO volume in December is $20.1 [billion, including refinancings], which amounts to the 2nd highest month in 2016,” J.P. Morgan Securities LLC analysts said in a note released on Monday.

Cairn Loan Investments LLP sold €362.57 million of notes in the firm’s second European CLO offering of the year.

Also, CELF Advisors LLP came with a €277.6 million refinancing of a vintage 2014 euro-denominated CLO deal.

Year to date, €16.54 billion of euro-denominated CLOs have priced, according to a BofA Merrill Lynch note released on Monday.

More than $35 billion of U.S. CLOs have been refinanced year to date, much higher than the $10.46 billion refinanced in 2015, the analysts report.

The secondary market saw BWIC volumes of about $395 million over the previous week, according to BofA Merrill Lynch.

“Bonds across the capital stack remained well bid,” the analysts said. “Supportive technicals continued to drive U.S. CLO 2.0 mezzanine spreads tighter.”

CLO BBB spreads tightened 25 basis points over the previous week to the Libor plus 725 bps area, while BB-rated notes firmed 25 bps to the Libor plus 1,075 bps area, according to the note.

Cairn prices €362.57 million

Cairn Loan Investments sold €362.57 million of notes due Feb. 15, 2030 at par in the new Cairn CLO VII BV transaction, according to a market source.

The CLO priced €203.9 million of class A-1 senior secured floating-rate notes (Aaa//AAA) at Euribor plus 99 bps in the senior tranche.

Barclays arranged the offering.

The transaction is backed primarily by senior secured loans and senior secured bonds.

Cairn has priced two euro-denominated CLOs year to date.

In 2015, Cairn sold one CLO and refinanced one vintage CLO transaction.

The CLO manager is based in London.

CELF refinances CLO

CELF Advisors refinanced €277.6 million of notes due April 15, 2027 from the vintage 2014 Carlyle Global Market Strategies Euro CLO 2014-1 DAC offering, according to a market source.

The CLO sold €218.25 million of senior secured floating-rate notes at Euribor plus 140 bps in the class A-R tranche.

Credit Suisse Securities (Europe) Ltd. arranged the transaction.

The deal is collateralized primarily by broadly syndicated first-lien senior secured corporate loans.

Proceeds will be used to redeem the original class A, B and C notes at par.

The CLO manager has priced two new CLO deals and refinanced two vintage CLO transactions year to date.

London-based CELF is part of the Washington, D.C.-based Carlyle Group LP.

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