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Oaktree reprices 369.75 million CLO; euro volume forecast to hit post-crisis high
By Cristal Cody
Tupelo, Miss., March 12 European CLO primary and refinancing issuance is expected to increase in 2018 following a busy pace in the first two months of the year.
Nearly 5 billion of euro-denominated CLOs have priced year to date, and several new deals are in the pipeline, market sources report.
In European refinancing action, Oaktree Capital Management (UK) LLP priced 369.75 million of notes in a repricing of a 2016 CLO.
BofA Merrill Lynch analysts now expect euro-denominated CLO issuance to hit a post-financial crisis high of 22 billion to 25 billion in 2018, up from their previous forecast of 18 billion, according to a research note released on Monday.
2018 YTD European leveraged loan issuance is up nearly 60%, driven by an active LBO market, the analysts said. Issuance conditions are attractive for CLOs and we understand a large number of warehousing facilities have been opened. Given the pace of CLO issuance so far this year, and the prospects for continued elevated supply through the second quarter, we now think that CLO issuance is likely to surpass 2017 volumes.
In 2017, nearly 20 billion of European CLOs were priced.
Oaktree refinances 2016 CLO
Oaktree Capital Management (UK) priced 369.75 million of notes due March 15, 2029 at par in a refinancing of a 2016 CLO, according to a market source.
Arbour CLO III Ltd. sold 10 million of 1% class A-1R senior secured fixed-rate notes and 230 million of class A-2R senior secured floating-rate notes at Euribor plus 58 basis points at the top of the capital structure.
Citigroup Global Markets Ltd. was the refinancing placement agent.
The CLO originally priced on Jan. 15, 2016. The deal had included 230 million of class A-1 senior secured floating-rate notes priced at Euribor plus 145 bps and 10 million of 1.688% class A-2 senior secured fixed-rate notes.
Proceeds will be used to redeem the original notes on March 15 at par.
London-based Oaktree Capital Management (UK) is an affiliate of Los Angeles-based Oaktree Capital Management, LP.
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