U.S. deal pipeline ramps up for post-holiday issuance; Alcentra brings €513.1 million CLO

By Cristal Cody

Tupelo, Miss., April 17 - Steady CLO issuance is expected after the holiday break following a strong first half of April, according to market sources on Thursday.

"A few things are coming down," a source said. "We do expect an active pipeline."

About 60 CLO deals totaling $16 billion are in the works, a source said.

At least seven more European CLO deals are in the pipeline, according to another market source.

More than $30 billion of CLOs have priced year to date.

U.S. market activity slowed on Thursday ahead of the long weekend, while in Europe, Alcentra Ltd. priced the €513.1 million Jubilee CLO 2014-XII BV deal, its second European offering of the year, according to a market source.

Alcentra sold the AAA tranche at Euribor plus 135 basis points, 5 bps tighter than where the firm brought the class A notes in the Jubilee CLO 2014-XI BV deal in January, a source said.

The new transaction brings total year-to-date European CLO issuance to €3.53 billion from eight deals.

Earlier in April, Blackstone/GSO Debt Funds Management Europe Ltd. priced the €513.6 million Holland Park CLO Ltd. offering.

Alcentra sells €513.1 million

Alcentra brought €513.1 million of notes due July 15, 2027 in the Jubilee CLO 2014-XII deal, according to a market source.

The CLO priced €302 million of class A floating-rate notes (//AAA) at Euribor plus 135 bps; €51 million of class B-1 floating-rate notes (//AA+) at Euribor plus 192 bps; €5 million of 3.25% class B-2 fixed-rate notes (//AA+); €26.5 million of class C floating-rate notes (//A+) at Euribor plus 258 bps; €24.9 million of class D floating-rate notes (//BBB+) at Euribor plus 342 bps; €36.9 million of class E floating-rate notes (//BB+) at Euribor plus 490 bps and €19 million of class F floating-rate notes (//B-) at Euribor plus 570 bps.

The deal included €47.8 million of subordinated notes in the equity tranche.

J.P. Morgan Securities LLC was the placement agent.

Alcentra will manage the CLO, which is backed primarily by euro-denominated senior secured loans and senior secured bonds.

Proceeds from the deal will be used to purchase a €498.75 million portfolio of European leveraged loans and bonds.

The London-based global asset management firm is an indirect subsidiary of BNY Alcentra Group Holding, Inc.

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