Lloyd's, ICG may bring €400 million CLO; U.S. set to outpace Europe issuance; spreads hold

By Cristal Cody

Tupelo, Miss., April 29 - Reports that Intermediate Capital Group plc and Lloyds Banking Group plc plan to bring a €400 million offering of notes in the largest collateralized loan obligation in Europe since the financial crisis began in 2008 kept attention on Europe on Monday, but the market is unlikely to match the pace U.S. issuers have shown this year, according to informed sources.

Additional details of the deal were not immediately available, but the offering is not expected to price until later in May or June.

Other CLOs sold in Europe this year include Cairn Capital Ltd.'s €300.5 million offering in February in the first new European CLO since the financial crisis, followed by Pramerica Investment Management Ltd.'s €300 million deal and Apollo Global Management, LLC's €325 million CLO sold earlier in April.

"The deals that have priced [in Europe] have been about €300 million to €350 million, so €400 million at the end of the day isn't that large, but it is a good positive sign for the European market," one source said.

The offering does not "suggest there's going to be a huge amount of issuance over in Europe," the source added.

"I think it will remain subdued with about €4 billion total. So far, there's been about €800 million or €900 million. There are a lot of underlying problems and a lot of restrictions from the rating agencies. The market really hasn't fully recovered."

In new domestic CLO issuance, Atrium X/Atrium X LLC sold $664.45 million of notes due July 16, 2025, with the senior tranches priced more than 15 basis points tighter than a CLO sold by Atrium IX/Atrium IX LLC in February, according to a source.

In the offering set to close later in May, the $409 million tranche of class A senior secured floating-rate notes (Aaa//) priced at Libor plus 112 bps.

In February, Atrium IX priced a $747.75 million offering that included a tranche of $522 million of class A floating-rate notes (Aaa/AAA/) at Libor plus 130 bps.

In the secondary market, senior triple A rated tranches are holding in the area of Libor plus 112 bps to 115 bps, a source said on Monday.

Atrium X brings offering

In the offering of notes due July 16, 2025, Atrium X sold $409 million of class A senior secured floating-rate notes (Aaa//) at Libor plus 112 bps; $48.5 million of class B-1 floating-rate notes at Libor plus 165 bps; $25 million of class B-2 2.93% fixed-rate notes; $53.25 million of class C floating-rate notes at Libor plus 260 bps; $32.75 million of class D floating-rate notes at Libor plus 350 bps; and $27.5 million of class E floating-rate notes at Libor plus 450 bps.

The deal also included a $68.45 million equity tranche.

Credit Suisse Securities (USA) LLC was the underwriter.

The CLO is backed by broadly syndicated senior secured loans and will be managed by Credit Suisse Asset Management LLC.

© 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.