Commerzbank prices €416.3 million CLO; CreekSource refinances $305.7 million

By Cristal Cody

Tupelo, Miss., April 23 – Details emerged on a new European CLO deal that priced in the previous week and a U.S. vintage CLO refinancing transaction that closed on Friday.

Commerzbank AG, London Branch priced €416.3 million of notes in the CLO manager’s first deal of the year.

In the U.S. primary market, CreekSource LLC refinanced $305.7 million of notes from a vintage 2015 CLO.

In the secondary market, U.S. and European spreads were mixed, according to a BofA Merrill Lynch note released on Monday.

U.S. BWIC volume came to $120 million in the previous week. AAA bonds made up 27% of the volume, while BBB-rated bonds comprised 16% and BB bonds made up 27% of trading, according to the note.

“The new-found optimism and return of risk-on in the broader market helped stall the spread widening trend that has defined most of the last few weeks among the mezz tranches,” BofA Merrill Lynch analysts said in the note.

U.S. CLO spreads were in general unchanged on the week with AAAs at Libor plus 102 basis points and B spreads at Libor plus 850 bps, according to the note.

In European CLO secondary trading, “AAA levels remain soft with spreads at around 80 bps,” the analysts said.

“Demand for investment grade tranches was generally weak, and BBB spreads appeared to widen a few basis points over the week,” the analysts said. “At the bottom of the capital structure, BB and single B bond spreads remain in the low 500s and 700s, respectively, 10 and 20 bps wider than at the end of 2017 according to our generic spread series.”

Commerzbank brings deal

In the new issuance, Commerzbank, London Branch priced €416.3 million of notes due 2031 in the Bosphorus CLO IV DAC deal, according to market sources.

Bosphorus CLO IV sold €246 million of the class A secured floating-rate notes at Euribor plus 82 bps.

BNP Paribas Securities Corp. arranged the deal.

Commerzbank priced one new CLO and refinanced one vintage CLO in 2017.

The firm priced one new CLO in 2016 and one deal in 2015.

The London-based CLO manager is a subsidiary of global banking and financial services company Commerzbank AG.

CreekSource resets CLO

CreekSource priced $305.7 million of notes in a refinancing and reset of the vintage 2015 Bean Creek CLO, Ltd./Bean Creek CLO LLC deal, according to a notice of executed amended and restated indenture on Friday.

The CLO sold $196.5 million of senior secured floating-rate notes at Libor plus 102 bps in the class A-R tranche.

Barclays was the arranger.

The maturity on the refinanced notes was extended to April 2031 from the original due date of Jan. 20, 2028.

The transaction is compliant with U.S. and European risk retention regulations.

Bean Creek CLO originally priced $305 million of notes in the offering on Dec. 1, 2015. The CLO had placed the $196.5 million of class A floating-rate notes at Libor plus 162 bps.

CreekSource is an affiliate of Carmel, Ind.-based investment management firm 40|86 Advisors, Inc.

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