GSO/Blackstone prices $1.02 billion CLO, largest deal year to date; U.S. CLO spreads flat

By Cristal Cody

Tupelo, Miss., May 1 – GSO/Blackstone Debt Funds Management LLC priced a $1,028,500,000 CLO in the largest-sized deal year to date.

The deal included seven tranches of notes.

Refinancing action has started to cool with about $69 billion of CLOs refinanced year to date, according to a BofA Merrill Lynch report.

“Only five deals refi'ed in the past week, compared with more than twenty deals a week at the peak of the wave,” the BofA Merrill Lynch analysts said. “The flood of refi supply has kept refi spreads from tightening in with new-issue spreads.”

U.S. CLO spreads ended Friday flat across the capital stack in the secondary market on light trading, according to the BofA Merrill Lynch note.

“For the fourth consecutive week, U.S. CLOs saw limited secondary activities,” the BofA Merrill Lynch analysts said. “Just over $150 [million] worth of bonds were up for the bid this week, hardly moving spread levels.”

CLO AAA-rated notes were unchanged at Libor plus 115 basis points. B-rated spreads held at Libor plus 825 bps.

European CLO secondary trading also was light with about €25 million of bonds on BWIC lists over the past week, the note said.

“Along with broader markets, spreads appeared to tighten following the results of the first round of the French presidential elections, though a scarce supply environment also appears to be supporting CLO pricing,” the BofA Merrill Lynch analysts said.

Euro CLO AAA tranches ended Friday 10 bps tighter on the week at Euribor plus 90 bps, while B-rated notes firmed 15 bps to Euribor plus 735 bps.

GSO/Blackstone brings CLO

GSO/Blackstone Debt Funds Management priced $1,028,500,000 of notes due April 20, 2029 in the new Catskill Park CLO, Ltd./Catskill Park CLO, LLC transaction, according to a market source.

The CLO sold $612.5 million of class A-1a senior secured floating-rate notes at Libor plus 118 bps in the senior tranche.

BofA Merrill Lynch arranged the offering.

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

GSO/Blackstone has priced three new CLOs and refinanced three vintage CLOs year to date.

The CLO manager priced five new U.S. CLOs and refinanced one vintage CLO in 2016.

The New York City-based firm is a subsidiary of Blackstone Group LP.

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