HPS prices €407.4 million CLO; lighter euro volume eyed; GSO brings $453.17 million CLO

By Cristal Cody

Tupelo, Miss., June 6 – In new issue supply, HPS Investment Partners CLO (UK), LLP tapped the European primary market with a €407.3 million CLO offering.

The European securitization market has had a slow start this year due to the Jan. 31 release of new technical regulations in the space, Kroll Bond Rating Agency said in a structured finance report on Thursday.

“As a result, the market came to a standstill during the first month of 2019, with just one widely syndicated CLO deal priced,” the agency said. “After receiving more clarity from regulators, issuers slowly began to reenter the market in February, but average weekly volumes only began to normalize towards the end of the first quarter.”

Through the first five months of the year, just €32.7 billion of securitized debt was placed with investors, down 32% from the €47.4 billion priced over the same period in 2018, according to the report.

Year to date, the European CLO/CDO market has seen about €12 billion of issuance, compared to €22 billion forecast for the year, the report said.

In 2018, the European CLO/CDO market had €27.2 billion of volume, up from €19.2 billion in 2017.

“Much of the growth in European securitization supply has been fueled by the CLO sector,” the report said. “The increase in volumes was partly fueled by U.S. managers entering the European markets to take advantage of favorable market conditions. However, as the arbitrage has become more challenging in 2019, we do not expect volumes to reach last year’s levels.”

Looking at the dollar-denominated primary market, GSO/Blackstone Debt Funds Management LLC priced $453.17 million of notes in a new CLO transaction.

Aqueduct European CLO prints

HPS Investment Partners CLO (UK) priced €407.3 million of notes due July 15, 2032 in the new issue Aqueduct European CLO 4-2019 DAC transaction, according to a market source.

The CLO sold €244 million of the class A floating-rate notes at Euribor plus 111 basis points.

Morgan Stanley & Co. International plc was the placement agent.

The CLO is backed primarily by euro-denominated broadly syndicated senior secured loans and bonds.

HPS Investment Partners has priced two new CLOs year to date.

The CLO manager is a subsidiary of New York-based investment firm HPS Investment Partners LLC.

GSO/Blackstone place CLO

GSO/Blackstone Debt Funds Management priced $453.17 million of notes due July 17, 2032 at par in a new CLO offering, according to a market source on Wednesday.

In the AAA-rated tranche, Niagara Park CLO Ltd./Niagara Park CLO LLC sold $288 million of class A floating-rate notes at Libor plus 130 bps.

BNP Paribas Securities Corp. was the placement agent.

The deal is backed primarily by broadly syndicated first-lien senior secured corporate loans.

GSO/Blackstone is a New York City-based subsidiary of alternative asset manager GSO Capital Partners LP.

© 2015 Prospect News.
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