Avoca to sell €310.75 million, AAAs talked with 140 bps spread; some euro CLOs on tap

By Cristal Cody

Tupelo, Miss., Nov. 4 - Avoca Capital Holdings plans to price a €310.75 million European collateralized loan obligation deal over the week, on the heels of CQS Management, Ltd.'s new €361.57 million CLO, according to market sources on Monday.

Avoca's AAA-rated senior note tranche is expected to price in the Euribor plus 140 basis points area, wider than deals priced earlier in October but in line with recent euro-denominated AAA issuance, a source said.

CQS sold €202.13 million of class A-1 floating-rate notes (expected Aaa//AAA) in the Grosvenor Place 2013-1 CLO at Euribor plus 140 bps on Thursday.

Nearly €5 billion of European CLOs have priced year to date, and market sources project about €6 billion of total European issuance for the year.

"It's difficult to see much more deals than that," a source said.

A handful of other European CLOs are in the pipeline, including NIBC Bank NV's €300 million North Westerly CLO IV offering, Intermediate Capital Group plc's St. Paul's CLO III Ltd. transaction and Pramerica Investment Management Ltd.'s €306.2 million Pinewood CLO 2013-1 BV deal that was postponed over the summer, according to market sources.

Avoca prepares CLO

Avoca Capital's offering includes six tranches of notes due Jan. 15, 2026, according to informed sources.

Avoca Capital CLO X Ltd. plans to price €166 million of class A floating-rate notes (/AAA/); €47.5 million of class B floating-rate notes (/BB/); €14.75 million of class C floating-rate notes (/A/); €20 million of class D floating-rate notes (/BBB/); €19 million of class E floating-rate notes (/BB/) and €43.5 million of subordinated notes in the equity tranche.

Credit Suisse Securities (Europe) Ltd. is the placement agent.

Avoca Capital will manage the CLO, which is backed by a portfolio of euro-denominated broadly syndicated senior secured corporate loans and bonds.

The Dublin-based European credit investment manager's last CLO deal was the €300 million Avoca CLO IX Ltd. offering in 2008.

KKR & Co. LP announced in October that it will acquire Avoca Capital in a transaction expected to close in the first quarter of 2014. KKR said in the announcement that the investment teams and processes, including portfolio management, for KKR and Avoca will remain unchanged by the deal.

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