Ares prices $613 million CLO; Carlyle brings €500 million deal; equity spread limits trade

By Cristal Cody

Tupelo, Miss., Feb. 3 – Primary activity continued with deals priced in the U.S. and European CLO markets, sources said on Tuesday.

Ares Management LLC brought a $613 million CLO offering, according to a market source. Ares priced the AAA-rated tranche of notes at Libor plus 150 basis points.

The Carlyle Group LP priced a €500 million deal in the year’s first European CLO transaction, a source said.

While secondary activity improved in the previous week on quiet primary action, that likely will change over the week, Wells Fargo Securities, LLC senior analyst Dave Preston and associate analyst Jason McNeilis said in a note on Tuesday.

“This week looks to see less secondary activity as the primary market emerges from hibernation,” the analysts said. “The bid/ask spread in equity prices is still wide, limiting trading.”

Ares prices $613 million

Ares Management sold $613 million of notes due 2025 in the Ares XXXIII CLO Ltd./Ares XXXIII CLO LLC offering, according to a market source.

The CLO priced $373.2 million of class A-1 floating-rate notes at Libor plus 150 bps at the top of the structure. At the bottom of the capital stack, the CLO placed $9.6 million of class E deferrable floating-rate notes at Libor plus 650 bps.

Goldman Sachs & Co. was the placement agent.

Ares CLO Management XXXIII, LP will manage the CLO.

The transaction is backed primarily by broadly syndicated senior secured loans.

Ares Management priced three CLO deals in the U.S. market in 2014, including the $1.26 billion Ares XXXI CLO Ltd./Ares XXXI CLO LLC transaction on July 30.

The alternative asset management firm is based in Los Angeles.

Carlyle taps Europe

The Carlyle Group priced €500 million of notes due 2029 in the Carlyle Global Market Strategies Euro CLO 2015-1 Ltd. deal, a source said.

The CLO sold €273.5 million of class A-1A senior secured floating-rate notes (Aaa//); €5 million of class A-1B senior secured fixed-rate notes (Aaa//); €53.9 million of class A-2A senior secured floating-rate notes (Aa2//); €12 million of class A-2B senior secured fixed-rate notes (Aa2//); €28.6 million of class B senior secured deferrable floating-rate notes (A2//); €27.6 million of class senior secured deferrable floating-rate notes (Baa2//); €28.6 million of class D senior secured deferrable floating-rate notes (Ba2//); €16.8 million of class E senior secured deferrable floating-rate notes (B2//); and €54 million of subordinated notes. Final pricing details were not available by press time.

London-based CELF Advisors LLP, part of the Carlyle Group, will manage the CLO.

The CLO is backed primarily by European senior secured loans and senior secured bonds.

Washington, D.C.-based Carlyle Group brought three European CLO transactions in 2014.

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