CQS sells €361.57 million CLO in return to deal market; CIFC prices fourth CLO in 2013

By Cristal Cody

Tupelo, Miss., Oct. 31 - CQS Management, Ltd. sold €361.57 million of notes on Thursday in the London firm's first European collateralized loan obligation transaction since 2007, according to an informed source.

The Grosvenor Place 2013-1 priced the AAA slice at Euribor plus 140 basis points, in line with general market expectations.

The deal brings total year-to-date issuance of broadly syndicated European CLOs to about €4.8 billion, down from a peak of about €38 billion in 2007, according to a market source.

The European primary market is expected to stay active through the year with a few transactions in the works, including NIBC Bank NV's €300 million North Westerly CLO IV offering and Intermediate Capital Group plc's St. Paul's CLO III Ltd. deal, market sources said.

Euro CLO spreads in the secondary market were quoted in late October at the 130 bps over Euribor range for AAA notes; at the 210 bps over Euribor range for AA notes; at the 310 bps spread area for A-rated notes; at the 510 bps over Euribor area for BBB-rated notes and at the 730 bps over Euribor area for BB notes, according to a J.P. Morgan Securities LLC note.

In the U.S. primary market, CIFC Asset Management LLC sold a $522.5 million CLO in its fourth deal of the year, a source said.

CQS prices €361.57 million

CQS Management sold €361.57 million of notes due 2026 on Thursday in the Grosvenor Place 2013-1, a source said.

The CLO priced €202.13 million of class A-1 floating-rate notes (expected Aaa//AAA) at Euribor plus 140 bps; €46.38 million of class A-2 floating-rate notes (expected Aa2//AA) at Euribor plus 210 bps; €21 million of class B floating-rate notes (expected A2//A) at Euribor plus 300 bps; €18.38 million of class C floating-rate notes (expected Baa2//BBB) at Euribor plus 385 bps; €22.75 million of class D floating-rate notes (expected Ba2//BB) at Euribor plus 510 bps and €11.38 million of class E floating-rate notes (expected B2//B-) at Euribor plus 610 bps.

The deal also included €39.55 million of subordinated notes in the equity tranche, downsized from an expected €40.18 million offering.

Deutsche Bank AG, London Branch arranged the transaction.

CQS Investment Management will manage the CLO, which is backed primarily by senior secured corporate loans.

CQS is a global management asset firm based in London.

CIFC sells $522.5 million

CIFC Asset Management brought $522.5 million of notes due Nov. 27, 2024 in the CIFC Funding 2013-IV Ltd./CIFC Funding 2013-IV LLC deal, according to an informed source.

CIFC Funding sold $4 million of class X senior secured floating-rate notes (Aaa/AAA/) at Libor plus 100 bps; $299 million of class A-1 senior secured floating-rate notes (Aaa/AAA/) at Libor plus 140 bps and $20 million of 3.31% class A-2 senior secured fixed-rate notes (Aaa/AAA/) at the top of the capital structure.

The CLO also sold $26.5 million of class B-1 senior secured floating-rate notes (Aa2) at Libor plus 185 bps; $15 million of 4% class B-2 senior secured fixed-rate notes (Aa2); $16.5 million of class C-1 mezzanine secured deferrable floating-rate notes (A2) at Libor plus 325 bps; $21.5 million of class C-2 mezzanine secured deferrable floating-rate notes (A2/A-/) at Libor plus 325 bps; $5 million of 5.41% class C-3 mezzanine secured deferrable fixed-rate notes (A2); $28 million of class D mezzanine secured deferrable floating-rate notes (Baa3) at Libor plus 350 bps; $33.5 million of class E junior secured deferrable floating-rate notes (Ba3) at Libor plus 475 bps; $8 million of subordinated notes 1 and $45.5 million of subordinated notes 2.

Morgan Stanley & Co. LLC arranged the deal.

CIFC Asset Management will manage the CLO, which is backed primarily by broadly syndicated senior secured corporate loans.

The firm was last in the market in September when it sold the $418 million CIFC Funding 2013-III, Ltd./CIFC Funding 2013-III LLC deal. The $119 million tranche of class A-1A senior secured floating-rate notes (/AAA/) in the 2013-III CLO priced at Libor plus 133 bps.

The New York City-based investment adviser is a subsidiary of CIFC Corp.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.