PennantPark prices; middle-market CLO supply hits $10 billion; PineBridge refinances

By Cristal Cody

Tupelo, Miss., Sept. 17 – PennantPark Investment Advisers LLC priced a $301.4 million debut middle-market CLO offering expected to close on Thursday.

“Collateralized loan obligations are a primary source of financing for small to middle enterprise lenders while broadly syndicated loan CLOs are typically arbitrage transactions,” Moody’s Investors Service said in its September CLO market report.

SME loans are usually smaller, have lower credit quality and are less liquid than broadly syndicated CLOs, according to the report.

“To compensate for these weaker credit characteristics, SME loans have higher spreads than BSLs, and maintain covenants which allow lenders to amend loans when there is a covenant breach,” Moody’s said. “Furthermore, SME CLOs have higher subordination than their BSL counterparts.”

About $10 billion of middle-market CLOs have priced year to date, market sources report.

In the European market, PineBridge Investments Europe Ltd. priced €342.7 million of notes in a second refinancing of a vintage 2013 broadly syndicated CLO.

The CLO was first refinanced in 2017.

PennantPark brings CLO

PennantPark Investment Advisers priced $301.4 million of notes due Oct. 15, 2031 in the debut PennantPark CLO I Ltd./PennantPark CLO I LLC middle-market transaction, according to an informed source.

The CLO sold $78.5 million of class A-1 notes at Libor plus 180 basis points at the top of the capital structure.

GreensLedge Capital Markets LLC was the placement agent.

PennantPark Investment Advisers is a middle-market investment firm based in New York.

PineBridge prices

PineBridge Investments Europe priced €342.7 million of notes due Jan. 17, 2031 in a second refinancing of the vintage 2013 Euro-Galaxy III CLO BV transaction, according to a market source.

Euro-Galaxy III CLO sold €153 million of class A-R2 floating-rate notes at Euribor plus 75 bps in the senior tranche.

J.P. Morgan Securities plc was the refinancing agent.

The CLO manager is an affiliate of New York City-based asset management firm PineBridge Investments LLC.

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