Onex prices €431.4 million CLO; Funding Circle, KKR, Ares print; euro volume hits high

By Cristal Cody

Tupelo, Miss., April 8 – Onex Credit Partners, LLC priced €431.4 million of notes in its first euro-denominated CLO offering since 2017.

Onex was in the dollar-denominated market earlier in the year with a U.S. CLO offering.

The CLO manager has priced a total of three CLOs to date.

In addition to Onex Credit Partners’ deal, the European primary market is heating up with other issuance, according to market sources.

KKR Credit Advisors (Ireland) Unlimited Co. priced an upsized €456.3 million CLO.

Ares European Loan Management LLP sold an upsized €461.63 million CLO.

Meanwhile, Funding Circle Ltd. priced £180.26 million of British pound sterling notes in a new securitization transaction backed by small- and medium-sized enterprise loans.

European CLO primary volume in the first quarter was at the “highest first-quarter level since before the financial crisis,” according to a BofA Merrill Lynch research note released on Monday.

CLO volume in the first quarter totaled €6.9 billion from new issues, along with €900 million of notes priced in two vintage CLO resets, the note said.

In the secondary market, about €100 million of European CLO bonds appeared on BWIC lists last week with spreads mostly flat across the capital structure, according to the report.

“Trading activity was focused on AAA bonds and non-investment-grade bonds, with no investment-grade mezzanine appearing in the BWICs we tracked,” BofA Merrill Lynch analysts said.

European CLO spreads were flat on Friday with AAA-rated tranches in general at the Euribor plus 100 basis points area.

Onex sells third euro CLO

Onex Credit Partners priced €431.4 million of notes due April 2030 in its first euro-denominated CLO offering of 2019, according to a market source and a news release from parent company Onex Corp. on Monday.

OCP Euro CLO 2019-3 DAC sold €255 million of the class A senior secured floating-rate notes at Euribor plus 94 bps.

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

The deal is backed primarily by broadly syndicated secured senior leveraged loans.

Onex Credit Partners has priced one dollar-denominated CLO and one euro-denominated deal year to date.

The private equity firm is based in Toronto.

KKR raises €456.3 million

KKR Credit Advisors (Ireland) priced an upsized €456.3 million of notes due July 15, 2032 in the Avoca CLO XX DAC transaction, according to a market source.

The CLO sold €267.75 million of class A-1 senior secured floating-rate notes at Euribor plus 109 bps and €11.25 million of class A-2 senior secured floating-rate notes at Euribor plus 135 bps.

The total deal was upsized from €405.9 million.

Morgan Stanley & Co. International plc was the placement agent.

The offering is backed primarily by broadly syndicated senior secured corporate loans.

KKR Credit Advisors (Ireland) is a Dublin-based credit investment management firm.

Ares prints CLO XI

Ares European Loan Management priced an upsized €461.63 million of notes due April 15, 2032 in a new euro-denominated CLO offering, according to a market source.

Ares European CLO XI BV sold €270 million of the class A-1 senior secured floating-rate notes at Euribor plus 109 bps and €7.9 million of class A-2 floating-rate notes at Euribor plus 135 bps.

The offering was upsized from €410.2 million.

Citigroup Global Markets Ltd. was the placement agent.

The CLO is backed mainly by euro-denominated senior secured loans and senior secured bonds.

Ares European Loan Management is an asset management firm based in London.

Funding Circle’s SME deal

Funding Circle sold £180.26 million of British pound sterling notes due Dec. 15, 2027 in a new securitization transaction backed by small- and medium-sized enterprise loans, according to market sources.

Small Business Origination Loan Trust 2019-1 DAC priced £119 million of class A floating-rate asset-backed notes at the British pound sterling Libor plus 105 bps.

Deutsche Bank AG, London Branch was the placement agent.

The deal is collateralized by small business loans originated through Funding Circle’s online lending platform.

Funding Circle is a London-based peer-to-peer lending marketplace for investors and small- and medium-sized businesses.

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