Invesco prices €305.4 million CLO; Moody’s considers upgrades; CBO/CDO/CLO paper mixed

By Cristal Cody

Tupelo, Miss., Dec. 9 – The European CLO primary market remains active in December with a new offering from Invesco European RR LP.

The CLO manager sold €305.4 million of notes in its second European broadly syndicated CLO deal of the year.

More than $78 billion of dollar-denominated CLOs and over €20 billion of euro-denominated broadly syndicated CLOs have priced year to date, according to market sources.

Meanwhile, Moody’s Investors Service created a buzz after the ratings agency announced on Tuesday that it has placed 188 securities from 114 CLOs on review for possible upgrade due to an update of its ratings methodology. Of those, 187 securities were issued by 113 broadly syndicated CLOs and one security was issued from a middle-market CLO.

“Approximately 94% of the securities we placed on review for possible upgrade today are currently rated Baa3 (sf) or higher,” Moody’s said.

In addition, Moody’s reported that it has upgraded 23 securities from 11 European broadly syndicated CLOs and placed the ratings of 117 securities from 44 European CLOs on review for possible upgrade.

The euro-denominated CLOs on review for possible upgrade include 61 securities rated Aa1-Aa3, 44 rated A1-A3, eight rated Baa1-Baa3, two rated Ba1-Ba3 and two rated B1 or below.

Trading volume strong

Looking at the secondary market, CBO/CDO/CLO paper was mixed on Tuesday in strong trading volume, according to Trace data.

In the previous session, $500.01 million of investment-grade notes traded flat at an average price of 99.10, up from $386.37 million of volume on Monday.

Lower down the capital stack, $393.89 million of lower-rated issues traded with an 82.10 average price on Tuesday, improved from $257.45 million of non-high-grade CBO/CDO/CLO issues that averaged 78.40 on Monday.

In the same periods last week, $158.84 million of high-grade paper averaged 98.50 on Nov. 30, while on Dec. 1, $329.93 million of investment-grade notes were traded at an average price of 99.00.

In non-high-grade CBO/CDO/CLO secondary volume last week, $109.38 million of issues traded at an average price of 80.10 on Nov. 30 and $175.36 million of securities traded with an 84.60 average price on Dec. 1.

Invesco Euro CLO prices

Invesco European RR priced €305.4 million of notes due Jan. 15, 2034 in the CLO, according to market sources.

Invesco Euro CLO V DAC sold €186 million of the class A senior secured floating-rate notes at Euribor plus 107 bps.

Barclays was the placement agent.

The notes are backed mostly by broadly syndicated first-lien senior secured corporate loans and bonds.

Invesco European is a New York-based fund manager and subsidiary of Invesco, Ltd.

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