Herbert Park European CLO prices AAA-rated slice at 135 bps spread; Invesco closes CLO

By Cristal Cody

Tupelo, Miss., Aug. 14 - GSO Capital Partners LP raised €413.2 million in the Herbert Park BV European collateralized loan obligation on the heels of two recently priced European CLOs as analysts forecast the market to climb higher than expected for the year, according to informed sources.

The Herbert Park CLO, GSO's second European CLO deal in 2013, sold the tranche of AAA-rated notes at Euribor plus 135 basis points, while the BB-rated tranche priced at Euribor plus 510 bps.

Total European CLO issuance in 2013 is expected to surpass €5 billion, market sources said.

In other primary activity, additional details emerged for Invesco Senior Secured Management, Inc.'s $413.5 million North End CLO, LLC/North End CLO, Ltd. offering. The CLO priced the triple A tranche at Libor plus 115 bps, when spreads were slightly tighter, a source said.

The second quarter saw nearly $17 billion priced in 36 new deals, according to Fitch Ratings on Wednesday.

Fitch said in a report that CLO issuance levels were "off" in the second quarter.

"After heavy issuance in the first quarter, new U.S. CLOs came to market at a slower pace in the second quarter," according to Fitch. "This brought the 2013 first half total for new CLOs to $43.5 billion [in 87 deals]."

Blackstone/GSO prices

The Herbert Park CLO sold €235 million of class A-1 secured floating-rate notes (//AAA) at Euribor plus 135 bps; €40 million of A-2 secured floating-rate notes (//AA+) at Euribor plus 185 bps and €37 million of class B secured floating-rate notes (//A) Euribor plus 300 bps.

The CLO also priced €21 million of class C secured deferrable floating-rate notes (//BBB) at Euribor plus 385 bps; €23.5 million of class D secured deferrable floating-rate notes (//BB) at Euribor plus 510 bps; €12 million of class E secured deferrable floating-rate notes (//B-) at Euribor plus 610 bps and €44.7 million of subordinated notes.

The notes are due 2026.

Deutsche Bank AG, London Branch was the underwriter.

Blackstone/GSO Debt Funds Europe Ltd., a unit of Blackstone Group LP, manages the European arbitrage cash flow CLO.

Proceeds will be used to purchase a €400 million portfolio of European leveraged loans and bonds.

The CLO transaction is expected to close on Sept. 12.

Blackstone has $24 billion in 52 global CLOs under management.

North End CLO closes

Invesco Senior Secured Management closed Wednesday on the $413.5 million North End CLO transaction, according to market sources.

The CLO sold seven tranches of notes due July 17, 2025, including $246.5 million of class A secured floating-rate notes (Aaa/AAA/) at Libor plus 115 bps; $56 million of class B secured floating-rate notes (/AA/) at Libor plus 165 bps; $29.5 million of class C secured deferrable floating-rate notes (/A/) at Libor plus 275 bps; $21 million of class D secured deferrable floating-rate notes (/BBB/) at Libor plus 350 bps; $18 million of class E secured deferrable floating-rate notes (/BB/) at Libor plus 460 bps; $10 million of class F secured deferrable floating-rate notes (/B/) at Libor plus 550 bps and $32.5 million of subordinated notes.

Merrill Lynch, Pierce, Fenner & Smith Inc. was the underwriter.

Invesco Senior Secured Management, a subsidiary of Atlanta-based Invesco Ltd., manages the cash-flow CLO, which is collateralized by a revolving pool of primarily broadly syndicated senior secured loans.

The CLO is Invesco's first offering since it sold the $452,382,000 Marea CLO, Ltd. in September.

The firm manages 17 CLOs with assets of $6 billion.

© 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.