Europe primary wakes; Cairn prices €308.55 million CLO; U.S. secondary ‘extremely busy’

By Cristal Cody

Tupelo, Miss., May 22 – European CLO issuance year to date grew to nearly €10 billion following new transactions over the week, including an offering from Cairn Loan Investments LLP, according to Prospect News data and market sources on Friday.

Cairn priced a €308.55 million CLO transaction and placed the AAA-rated notes at Euribor plus 130 basis points.

Credit Suisse Asset Management Ltd. was in the market on Thursday with the €413.53 million dual currency Cadogan Square CLO VI BV deal. The AAA-rated tranches priced at Euribor/Libor plus 130 bps.

U.S. CLO secondary trading picked up over the week while May issuance remains thin, according to a Wells Fargo Securities, LLC report.

“Primary supply for the month is low, secondary supply is high and spreads have tightened,” Wells Fargo Securities senior analyst Dave Preston said in a note on Friday.

“The CLO secondary market was extremely busy this week, with more than $1.2 billion of bid lists – in a three-day period,” Preston said. “This is approximately double the usual weekly average. At this point, next week’s volume appears to be lighter, as accounts are likely suffering from bid list fatigue and looking for a brief pause in a short week.”

Cairn prices €308.55 million

Cairn Loan Investments priced €308.55 million of notes due June 22, 2028 in the Cairn CLO V BV transaction, according to a market source.

The CLO sold €181.8 million of class A senior secured floating-rate notes at Euribor plus 130 bps at the top of the capital structure.

Citigroup Global Markets Inc. was the placement agent.

Cairn Loan Investments will manage the CLO.

The portfolio is backed primarily by euro-denominated senior secured obligations.

Proceeds from the offering will be used to purchase a €300 million portfolio of mostly European leveraged loans and bonds.

Cairn Loan Investments is a subsidiary of Cairn Capital. The London-based credit asset management firm priced one euro-denominated CLO in 2014.

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