Pramerica, Ares tap markets; ACAS CLO in works; U.S., Europe deal pace on the rise

By Cristal Cody

Tupelo, Miss., July 30 – CLO managers tapped primary markets in the United States and Europe with new deals, while the deal pipeline going forward is expected to stay active, according to market sources on Thursday.

Pramerica Investment Management Ltd. priced a €415.12 million euro-denominated CLO, the firm’s second transaction of the year.

In the U.S. deal market, Ares Management LLC printed $813.6 million of notes in its second new CLO offering this year.

Coming up, American Capital CLO Management, LLC plans to price a $509.99 million CLO.

Deal activity is expected to continue over late summer and fall with CLO managers ramping up CLOs following a slow pace over June and early July, according to market sources.

“I was in London last week talking with a bunch of investors, and people are raising money,” one CLO source said. “It’s been very busy.”

Pramerica prices CLO

Pramerica Investment Management sold €415.12 million of notes due Oct. 15, 2029 in the Dryden 39 Euro CLO 2015 BV sale, according to a market source.

Dryden 39 Euro CLO 2015 priced €221 million of class A-1 senior secured floating-rate notes at Euribor plus 135 basis points in the senior tranche.

Credit Suisse Securities (Europe) Ltd. arranged the deal.

Pramerica Investment Management will manage the CLO.

The CLO has a two-year non-callable period and a four-year reinvestment period.

The deal is backed primarily by euro-denominated senior secured loans and bonds.

Pramerica has priced two euro-denominated CLOs year to date.

The leveraged finance arm of Prudential Financial, Inc. is based in London.

Ares raises $813.6 million

Ares Management priced $813.6 million of notes due July 29, 2026 in its CLO offering, a market source said.

Ares XXXIV CLO Ltd./Ares XXXIV CLO LLC sold $495 million of class A senior floating-rate notes (Aaa/AAA/) at par with a spread of Libor plus 141 bps in the senior tranche.

Barclays was the placement agent.

Ares Management affiliate Ares CLO Management LLC will manage the CLO.

The CLO is non-callable until July 29, 2017. The reinvestment period ends July 29, 2019.

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

Ares Management has priced two new CLOs and refinanced one CLO year to date.

The Los Angeles-based alternative asset management firm brought three CLO deals in 2014.

American Capital on tap

Looking ahead on the calendar, American Capital CLO Management plans to price $509.99 million of notes in the ACAS CLO 2015-2, Ltd./ACAS CLO 2015-2 LLC transaction, according to a market source.

The deal includes $225 million of class A floating-rate notes (//AAA); $100 million of class A floating-rate loans (//AAA); $40.5 million of class B floating-rate notes; $42 million of class C floating-rate notes; $27.5 million of class D floating-rate notes; $25 million of class E floating-rate notes and $49.99 million of subordinated notes.

Wells Fargo Securities, LLC is the placement agent.

American Capital CLO Management will manage the CLO.

The CLO has a two-year non-call period and a four-year reinvestment period.

The transaction is backed mainly by first-lien senior secured corporate loans.

Proceeds from the deal will be used to purchase a portfolio of about $500 million of mostly senior secured leveraged loans.

American Capital CLO Management previously was in the primary market on April 15 with the $552.4 million ACAS CLO 2015-1, Ltd. deal.

American Capital CLO Management is a subsidiary of Bethesda, Md.-based private equity firm and asset manager American Capital Asset Management, LLC.

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