Alcentra sells $403.75 million CLO; Commerzbank, Brigade, Churchill price; mezzanines firm

By Cristal Cody

Tupelo, Miss., Dec. 12 – In new dollar-denominated CLO issuance, Alcentra NY, LLC sold $403.75 million of notes in the manager’s second deal of the year.

Elsewhere in the European primary market, Commerzbank AG, London Branch closed Thursday on a new €362.36 million CLO in the manager’s first offering of the year.

Brigade Capital Europe Management, LLP also closed on a new €415.1 million CLO offering, the manager’s first euro-denominated deal this year.

In the middle-market space, Churchill Asset Management LLC closed Thursday on a new $356.65 million CLO transaction.

“The successful closing of this fund, amidst challenging conditions, reflects Churchill’s experience and long-standing presence in the CLO market,” said David Heilbrunn, Churchill’s head of product development and capital raising, in a news release. “We once again achieved competitive pricing – a testament to investor familiarity with Churchill’s underwriting and CLO management expertise.”

The CLO’s capital structure includes nine classes of notes, including a BB class split into BB+ and BB- tranches.

In other market activity, CLO investors were mostly “bullish” on the market at the Opal Group CLO industry conference in California held earlier in the week, according to a Wells Fargo Securities LLC research note on Thursday.

“We would describe the tone of the market as two-toned: CLO investors were almost universally bullish, while CLO issuers were somewhat more bearish,” Wells Fargo analysts said in the report. “While a minority of CLO investors were more cautious, we found no completely bearish CLO investors.”

Sentiment for lower CLO mezzanine tranches also has “shifted nearly 180 degrees since the depths of October/early November,” according to the note.

Benchmark BB spreads are in the Libor plus 700 basis points to 725 bps range – about 75 bps to 100 bps tighter than the levels of late October, the note said.

BBB spreads are about 35 bps tighter over the same period.

“We believe the rally was driven by CLOs reaching historically wide levels compared to corporates, which drew in non-traditional CLO investors,” the analysts said. “As buyers emerged, existing CLO investors realized the market had found a floor, and, pushed on by fear of missing out, began buying.”

Shackleton prices

Alcentra NY sold $403.75 million of notes due Jan. 15, 2030 in the Shackleton 2019-XV CLO, Ltd./Shackleton 2019-XV CLO LLC transaction, according to a market source.

Shackleton 2019-XV CLO priced $256 million of class A floating-rate notes at par to yield Libor plus 125 bps in the AAA-rated tranche.

Barclays was the placement agent.

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

The New York-based firm is part of BNY Alcentra Group Holdings, Inc.

Bosphorus CLO V settles

Commerzbank closed Thursday on the new €362.36 million CLO, according to market sources.

Bosphorus CLO V DAC sold €97 million of class A-1 secured floating-rate notes at Euribor plus 101 bps and €120 million of class A-2 secured floating-rate notes at Euribor plus 143 bps in the senior tranches. The notes priced at par.

BNP Paribas Securities Corp. was the placement agent.

The notes, due in December 2032, were admitted for trading on the Global Exchange Market on Thursday.

The CLO is backed primarily by broadly syndicated senior secured obligations.

Commerzbank, London was in the primary market in 2018 with one new deal.

The London-based CLO manager is a subsidiary of global banking and financial services company Commerzbank AG.

Brigade sells €415.1 million

Brigade Capital Europe Management closed on a new €415.1 million CLO offering, according to market sources on Thursday.

The Armada Euro CLO IV DAC vehicle sold €244 million of class A senior secured floating-rate notes at par to yield Euribor plus 91 bps at the top of the capital stack.

Citigroup Global Markets Ltd. was the placement agent.

The notes are due July 15, 2033.

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

Brigade Capital Management is a London-based investment manager.

Churchill prices

Churchill Asset Management priced $356.65 million of notes due Jan. 23, 2032 in the middle-market CLO offering that closed Thursday, according to an informed source and a company news release.

Churchill Middle Market CLO IV Ltd./Churchill Middle Market CLO IV LLC sold $130 million of the class A-1 floating-rate notes at Libor plus 175 bps.

Natixis Securities Americas LLC was the placement agent.

Churchill affiliate Nuveen Alternatives Advisors LLC will manage the CLO. Churchill will serve as the subadvisor.

The deal is backed primarily by middle-market senior secured loans, 90% of which have been purchased as of closing.

Nuveen is the asset management division of New York-based TIAA Global Asset Management, part of Teachers Insurance and Annuity Association of America.

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