Blackstone/GSO prices €513.6 million CLO; April primary active; Europe deal pipeline fills

By Cristal Cody

Tupelo, Miss., April 3 - Blackstone/GSO Debt Funds Management Europe Ltd. priced an upsized €513.6 million collateralized loan obligation in the year's seventh European deal, according to an informed source.

The Holland Park CLO Ltd. transaction priced the AAA-rated tranche of floating-rate notes at Euribor plus 140 basis points, in line with recent issuance.

The transaction brings year-to-date European CLO issuance to €3.02 billion, according to market sources.

Eight more European CLOs are in the pipeline, according to an informed source.

About €10 billion to €15 billion of euro-denominated CLO issuance is forecast for the year.

In the U.S. primary market, GSO/Blackstone Debt Funds Management LLC priced the $510.32 million Pinnacle Park CLO Ltd./Pinnacle Park CLO LLC deal via Wells Fargo Securities LLC, according to a market source. Final details were not available by press time.

In other new issuance, KCAP Financial, Inc. announced that its portfolio company, Trimaran Advisors, LLC, priced the $468 million Catamaran CLO 2014-1 Ltd. deal. Final pricing details were not immediately available.

KCAP Financial said it will invest about $12.5 million across junior tranches of notes in the CLO.

The transaction is Trimaran's third CLO offering since the firm was acquired by KCAP in 2012.

The second quarter has seen a strong start with new deals brought over the week following more than $21 billion of issuance in the first quarter, according to market sources.

New U.S. CLO AAA spreads remain stuck in the Libor plus 150 bps to Libor plus 160 bps area, according to J.P. Morgan Securities LLC analysts.

"We think the stickiness of CLO AAA spreads at L+155 bps is not just due to regulatory uncertainty but also supply pressures and a plethora of first/second-time managers which tend to price at a concession," the analysts said in a note. "On the other hand, excluding refinancing, the average CLO in 1Q was $509 [million], the largest quarterly CLO 2.0 average since 2012 and indicative of the bid for yield."

During the first quarter, 43 managers, including six first-time CLO managers, priced deals, compared to the 53 managers and five first-time managers that brought deals in the first quarter of 2013, according to the analysts.

Blackstone/GSO prices CLO

Blackstone/GSO Debt Funds Management Europe upsized its CLO deal to €513,625,000 from an initial estimate of €411.5 million, according to an informed source.

The Holland Park CLO priced €291,875,000 of class A-1 senior secured floating-rate notes (Aaa) at Euribor plus 140 bps and €58.75 million of class A-2 senior secured floating-rate notes (Aa2) at Euribor plus 200 bps; €30 million of class B senior secured deferrable floating-rate notes (A2) at Euribor plus 265 bps; €23.75 million of class C senior secured deferrable floating-rate notes (Baa2) at Euribor plus 345 bps; €37.5 million of class D senior secured deferrable floating-rate notes (Ba2) at Euribor plus 475 bps and €17.5 million of class E senior secured deferrable floating-rate notes (B2) at Euribor plus 575 bps.

The deal included €54.25 million of subordinated notes in the equity tranche.

BNP Paribas Securities Corp. was the placement agent.

Blackstone/GSO Debt Funds Management Europe will manage the CLO.

The CLO is backed primarily by euro-denominated senior secured loans or senior secured notes to broadly syndicated corporate borrowers.

The notes are due May 14, 2027.

Blackstone/GSO Debt Funds Management, a subsidiary of asset manager GSO Capital Partners LP, priced three European CLOs in 2013, including the €403.35 million Grand Harbour I BV deal, the €413.2 million Herbert Park BV offering and the €615.69 million Richmond Park CLO Ltd. transaction.

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