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Chenavari prices 372.95 million CLO reset; heavy CLO refinancing supply dampens market
By Cristal Cody
Tupelo, Miss., Sept. 26 Chenavari Credit Partners LLP sold 372.95 million of notes in a refinancing and reset of a vintage 2016 CLO.
More than 10 billion of vintage euro-denominated CLOs have been reset year to date, according to a BofA Merrill Lynch report.
In the U.S. market, more than $100 billion of vintage dollar-denominated CLOs have been refinanced and or reset year to date.
Heavy refinancing supply is putting a damper on the tone in the CLO market, Wells Fargo Securities, LLC analysts said in a note on Wednesday following an investors conference that ended Tuesday.
On the technical side, the tone from CLO buyers and issuers ranged from resignation/frustration about heavy near-term supply, to optimism that a light at the end of the tunnel was visible, as reset/refi supply is likely to recede after Q1 2019, the analysts said. However, the refi/reset overhang may limit longer-term spread tightening in 2019, as tighter spreads will likely bring out more reset/refi supply.
Toro CLO 2 reprices
Chenavari Credit Partners sold 372.95 million of notes in a refinancing and reset of the Toro European CLO 2 DAC transaction, according to a market source and a notice to noteholders on Wednesday.
The CLO priced the 248 million of class A-R floating-rate notes at par to yield Euribor plus 90 basis points.
Citigroup Global Markets Ltd. was the refinancing placement agent.
The maturity on the notes was extended by two years to Oct. 15, 2030.
In the original 362.8 million deal issued Sept. 28, 2016, the CLO sold 212.3 million of class A senior secured floating-rate notes at Euribor plus 126 bps.
Proceeds will be used to redeem the original notes.
Chenavari Credit Partners is part of London-based Chenavari Financial Group Ltd.
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