CarVal, Napier Park price CLOs; BlackRock refinances; tighter middle-market AAA spreads eyed

By Cristal Cody

Tupelo, Miss., July 12 – The CLO dollar- and euro-denominated primary markets remain busy, while refinancing action may pick up in the months ahead, according to market sources on Friday.

CarVal CLO Management, LLC priced $504 million of notes in the manager’s second CLO offering of the year.

In European primary action, Napier Park Global Capital Ltd. sold €406.2 million of notes in a new deal.

Meanwhile, BlackRock Investment Management (UK) Ltd. refinanced €360 million of notes from a vintage European CLO.

The BlackRock European CLO II DAC vehicle refinanced the AAA-rated tranche 10 basis points tighter than where it priced in 2016.

Dollar-denominated CLO refinancing activity may pick up, Fitch Ratings said in a report on Friday.

Broadly syndicated CLO AAA spreads “stabilized” in the second quarter versus the first quarter after more than a year of climbing, according to the report.

The average AAA spread on new and reissued broadly syndicated CLOs averaged 137 bps, nearly unchanged from the first quarter, Fitch said.

Middle-market CLO AAA spreads averaged at Libor plus 168 bps, down from 175 bps in the first quarter, the report said.

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