Och-Ziff, Brigade price euro CLOs; middle market deal action picks up; secondary spreads flat

By Cristal Cody

Tupelo, Miss., Aug. 7 – Deal action in the European CLO primary market is picking up in August, along with activity in the U.S. middle-market space.

Och-Ziff Europe Loan Management Ltd. priced a €415.25 million CLO in the firm’s first deal of the year and second euro-denominated CLO to date.

Brigade Capital Europe Management, LLP priced a new €368.2 million CLO.

More than €10 billion of euro-denominated CLOs have priced year to date, according to market sources.

In middle-market issuance, Tennenbaum Capital Partners LLC affiliate SVOE/MM LLC’s series I priced $350.85 million of notes in the TCP Whitney CLO, Ltd. transaction.

The deal is the first issuance in the middle-market primary space since June.

“Middle market CLO issuance has been historically strong year to date; however, issuance lagged somewhat in July as no MM CLOs priced,” according to a Wells Fargo Securities, LLC report.

Middle-market CLO volume year to date totals about $7.31 billion, compared to the $8.25 billion brought in all of 2016, according to BofA Merrill Lynch.

“The pricing DMs for TCP Whitney CLO speak to increasing middle-market demand,” BofA Merrill Lynch analysts said in a note. “Its AAA DM of 168 [basis points] is the tightest print we have seen since August 2013.”

In the secondary market, CLO spreads ended the previous week flat across the capital structure with about $146 million of bonds appearing on BWIC lists, according to the note.

AAA-rated notes were steady at Libor plus 110 bps.

Och-Ziff prices CLO

Och-Ziff Europe Loan Management priced €415.25 million of notes due Oct. 15, 2030 in the new euro-denominated CLO transaction, according to a market source.

OZLME II DAC sold €225 million of class A-1 senior secured floating-rate notes at par to yield Euribor plus 90 bps and €10 million of 1.2% class A-2 senior secured fixed-rate notes at par in the AAA-rated tranches.

Barclays was the placement agent.

Och-Ziff was previously in the European CLO primary market on Nov. 3, 2016 with its first deal, the €413 million OZLME BV transaction.

The London-based firm is part of alternative asset management Och-Ziff Capital Management Group LLC.

Brigade sells €368.2 million

Brigade Capital Europe Management priced €368.2 million of notes due 2030 in its CLO offering, according to a market source.

The Armada Euro CLO I DAC deal priced €211 million of class A senior secured floating-rate notes at par to yield Euribor plus 93 bps at the top of the capital stack.

Citigroup Global Markets Ltd. was the placement agent.

Brigade Capital Management is a London-based investment manager.

Middle-market CLO prices

The SVOE/MM LLC’s series I CLO manager priced $350.85 million of notes due Aug. 30, 2029 in the new middle-market CLO transaction, according to a market source.

TCP Whitney CLO sold $195 million of floating-rate notes at a discount margin of Libor plus 168 bps in the class A-1 tranche.

Natixis Securities Americas LLC arranged the transaction.

The deal is backed primarily by middle-market senior secured loans.

Tennenbaum Capital Partners is a Santa Monica, Calif.-based investment management firm.

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