Bain prices €362.5 million CLO; Oaktree brings $553.1 million; secondary volume thins

By Cristal Cody

Tupelo, Miss., Aug. 28 – Primary action remained steady in the CLO market in late August, while secondary market activity has slowed.

In new issuance, Bain Capital Credit, Ltd. priced a €362.5 million euro-denominated CLO transaction.

Looking at the U.S. primary market, Oaktree Capital Management LP placed a $553.1 million three-tranche CLO.

More than €10 billion of new issue CLOs have priced year to date, while about $62 billion of new U.S. dollar-denominated CLOs have priced so far in 2017, according to market sources.

New issue spreads have tightened considerably since the start of the year, according to a BofA Merrill Lynch analysts’ report released on Monday.

“Compared to the beginning of the year, new-issue U.S. CLO spreads have tightened in by about 20, 20, 45, 90, 110, and 85 [basis points] from AAA to single-B,” the analysts said.

In the secondary market, volume slowed over the past week with $161 million of bonds appearing on BWIC lists, according to the note.

“Bid levels remained very strong, with much participation coming from real money accounts,” the analysts said. “No equity items were up for bid.”

Spreads were flat across the capital structure, except BBBs, which headed out on Friday 25 bps tighter on the week at Libor plus 325 bps, the analysts said.

CLO AAA-rated notes were flat on the week at Libor plus 110 bps.

In the European secondary market, volume was thin over the past week with about €25 million of bonds on BWIC lists, according to the note. European spreads were flat across the stack with AAAs ending Friday unchanged on the week at Euribor plus 88 bps.

Bain prices Euro CLO

Bain Capital Credit priced €362.5 million of notes due Oct. 17, 2030 in the new Bain Capital Euro CLO 2017-1 DAC transaction, according to market sources.

The CLO sold €206.5 million of class A senior secured floating-rate notes at par to yield Euribor plus 87 bps at the top of the capital structure.

Citigroup Global Markets Ltd. arranged the financing.

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

Bain Capital, a Boston-based asset management firm, is a subsidiary of Bain Capital LP.

Oaktree brings EIF III CLO

Oaktree Capital Management priced $553.1 million of notes due Oct. 17, 2029 in the offering, according to market sources.

Oaktree EIF III Series II, Ltd. sold $330 million of class A-1 senior secured floating-rate notes at a discount margin of Libor plus 118 bps in the senior slice.

Wells Fargo Securities, LLC arranged the transaction.

The CLO is backed predominantly by broadly syndicated first-lien senior secured corporate loans.

Oaktree Capital Management priced two new U.S. CLO deals in 2016.

The Los Angeles-based asset management firm is a subsidiary of Oaktree Capital Group, LLC.

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