CVC sells 415.6 million CLO; Bain refinances U.S. CLO; thin supply helps secondary spreads

By Cristal Cody

Tupelo, Miss., Feb. 13 – CVC Credit Partners European CLO Management LLP priced €415.6 million of notes in the primary market’s second new euro-denominated CLO offering of the year.

Intermediate Capital Managers Ltd. priced the €413.99 million previously reported St. Paul’s CLO VII DAC deal on Jan. 30.

In the refinancing space, Bain Capital Credit Ltd. priced $684.4 million of notes in a refinancing of a vintage 2013 CLO.

While new 2017 issuance totals nearly $4 billion in the broadly syndicated CLO market, more than $14 billion of vintage U.S. CLOs have been refinanced year to date, sources report.

More than €2 billion of euro-denominated CLOs have priced or been refinanced year to date, according to Prospect News data.

The lack of new CLO issuance is helping the secondary market with spreads stable to tighter in vintage deals, according to market sources.

“Limited new supply in the primary market continued to support bidding for secondary CLO debt notes,” BofA Merrill Lynch analysts said in a research note.

The U.S. secondary market saw about $588 million of BWIC volume over the past week.

Few bonds appeared on BWIC lists in the European secondary market, according to BofA Merrill Lynch.

“We tracked around €20 [million] of auction volumes, most of which was 2.0 bonds,” the analysts said.

CVC prices euro CLO

CVC Credit Partners European CLO Management priced €415.6 million of notes due April 23, 2030 in the CVC Cordatus Loan Fund VIII DAC transaction, according to a market source.

The CLO sold €206 million of class A-1 senior secured floating-rate notes at par to yield Euribor plus 93 basis points and €30 million of 1.1% class A-2 senior secured fixed-rate notes at par at the top of the capital stack.

Goldman Sachs International arranged the offering.

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

CVC Credit Partners European CLO Management is an affiliate of CVC Credit Partners Group Ltd., the credit management arm of London-based private equity firm CVC Capital Partners Ltd.

CVC Credit Partners priced two new European CLO offerings and refinanced one CLO deal in 2016.

Bain refinances

Bain Capital Credit priced $684.4 million of notes at par in a refinancing of the Race Point VIII CLO Ltd./Race Point VIII CLO Corp. offering, according to a market source.

The CLO sold $427 million of class A-R floating-rate notes at Libor plus 134 bps in the AAA-rate tranche.

Citigroup Global Markets Inc. arranged the refinancing.

Bain Capital, formerly known as Sankaty Advisors LP, is the CLO manager.

The maturity on the refinanced notes was extended to Feb. 20, 2030 from the original Feb. 20, 2025 maturity.

The deal is backed primarily by broadly syndicated loans.

Proceeds from the deal will be used to redeem the original notes.

Bain Capital Credit is an asset management firm based in Boston.

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