ICG, Spire tap Europe; Rothschild, Octagon, Steele Creek price CLOs; BB, B spreads soft

By Cristal Cody

Eureka Springs, Ark., May 31 – May is ending on a strong note with new CLO issuance priced in the U.S. and European primary markets, according to sources on Tuesday.

Intermediate Capital Managers Ltd. tapped the European market with a new €412.8 million deal, its first CLO offering since 2014.

Spire Partners LLP returned to the euro-denominated market for the second time this year with a €359.7 million transaction.

In the U.S. primary market, details emerged on new deals from CLO managers Rothschild North America Inc., Octagon Credit Investors, LLC and Steele Creek Investment Management LLC.

Rothschild North America raised $305.5 million in an offering, its first CLO transaction since acquiring CLO manager West Gate Horizons Advisors, LLC in 2015.

Octagon Credit Investors sold $510.4 million of notes in its second CLO deal of the year.

Steele Creek Investment Management brought a $306.5 million CLO transaction to market, its first offering since 2015.

Global CLO volume totaled $6.4 billion in 15 deals in May, 12 of which were dollar-denominated CLOs totaling $5.27 billion for the month, according to Prospect News data.

In the secondary market, 2.0 BB and B CLO spreads were quoted 25 basis points weaker over the previous week, while the rest of the capital stack was flat. CLO BB-rated spreads traded 25 bps wider at Libor plus 975 bps, while B spreads eased 25 bps to Libor plus 1,450 bps area over the past week, according to a BofA Merrill Lynch report released on Tuesday.

AAAs were unchanged at Libor plus 155 bps.

“Securitized products cash sectors lagged the good performance in their synthetic counterparts, which tells us something about liquidity concerns in the market: it appears as if there is lingering bearishness in deeper credit CLOs and CMBS and market participants are less comfortable owning risk going into the summer, where liquidity might languish,” BofA Merrill Lynch strategists said in the report.

ICG brings €412.8 million

Intermediate Capital Managers priced €412.8 million of notes due June 11, 2029 in the new euro-denominated CLO deal, a market source said.

St Paul’s CLO VI D.A.C. sold €245 million of class A-1 senior secured floating-rate notes at Euribor plus 143 bps, €34 million of class A-2A floating-rate notes at Euribor plus 215 bps and €10 million of 2.29% class A-2B senior secured fixed-rate notes in the senior tranches.

Citigroup Global Markets Ltd. was the placement agent.

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

Intermediate Capital Managers is a Paris-based investment firm and subsidiary of London-based Intermediate Capital Group plc, which last priced a euro-denominated CLO on Aug. 1, 2014.

Spire prices Aurium CLO II

Spire Partners priced €359.7 million of notes due July 16, 2029 in the Aurium CLO II Designated Activity Co. transaction, according to a market source.

The CLO sold €205 million of class A senior secured floating-rate notes at Euribor plus 140 bps at the top of the capital structure.

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

The transaction is backed primarily by euro-denominated senior secured loans, senior secured bonds and eligible investments.

The deal is the second CLO transaction that Spire Partners has priced in 2016. The firm placed the €308.77 million Aurium CLO I Ltd. offering on March 3.

Spire Partners is a London-based independent fund management firm that focuses on European non-investment grade credit.

Rothschild sells CLO

Rothschild North America raised $305.5 million in a new CLO transaction, according to a market source.

Ocean Trails VI CLO priced $130.48 million of class A-1 floating-rate notes at Libor plus 175 bps at the top of the capital stack.

Nomura Securities International, Inc. arranged the deal.

New York-based Rothschild acquired CLO manager West Gate Horizons Advisors of Los Angeles in 2015.

Octagon prints $510.4 million

Octagon Credit Investors priced $510.4 million of notes due July 15, 2027 in the Octagon Investment Partners 27, Ltd. transaction, a market source said.

The CLO sold $310 million of class A senior secured floating-rate notes at Libor plus 153 bps in the senior slice.

Citigroup Global Markets Inc. was the placement agent.

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

Octagon Credit Investors has priced two CLO transactions year to date.

The New York-based credit investment firm, which was acquired earlier this year by Conning & Co., priced three CLOs in 2015.

Steele Creek returns

Steele Creek Investment Management sold $306.5 million of notes in the firm’s first CLO deal of 2016, according to a market source.

At the top of the capital structure, Steele Creek 2016-1 CLO Ltd. priced $190.5 million of class A floating-rate notes at Libor plus 170 bps.

BNP Paribas Securities Corp. was the placement agent.

Steele Creek Investment Management was last in the primary market in 2015 with the $306.98 million Steele Creek CLO 2015-1 Ltd./Steele Creek CLO 2015-1, LLC deal.

The Charlotte, N.C.-based asset management firm is a subsidiary of global advisory Moelis & Co. LLC.

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