Babson taps Europe, U.S. with two deals; euro-denominated CLO mezzanine bonds firm

By Cristal Cody

Tupelo, Miss., July 27 – Babson Capital placed two CLOs in the U.S. and European primary markets, with the AAA-rated tranches pricing on the tight side of recent issuance.

Babson Capital Management (UK) Ltd. brought €415.1 million of notes in the manager’s first euro-denominated CLO deal in 2015.

Babson Capital Management LLC priced $512 million of notes in the Babson CLO 2015-II Ltd./Babson CLO 2015-II LLC transaction.

In the secondary market, U.S. spreads have been mostly unchanged, according to a market note from BofA Merrill Lynch analysts.

U.S. BWIC volumes were $500 million to $600 million for the previous week, while about €50 million of euro-denominated CLO notes appeared on BWIC lists.

Euro-denominated 2.0 mezzanine bonds “traded well, with spread tightening of around 10-20 bps for single A to BB rated bonds,” the analysts said.

Babson Capital Management (UK) sold €415.1 million of notes due Aug. 31, 2023 in the Babson Euro CLO 2015-1 BV offering, according to a market source.

Babson Euro CLO 2015-1 priced €206.7 million of the class A-1 senior secured floating-rate notes at Euribor plus 135 basis points in the AAA-rated tranche.

Goldman Sachs International arranged the deal.

Babson Capital Management priced $512 million of notes, according to a market source.

Babson CLO 2015-II sold $225 million of class A-1 floating-rate notes at Libor plus 140 bps at the top of the capital stack.

BofA Merrill Lynch was the placement agent.

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