Euro CLOs rush to refinance before Global ABS
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Euro CLOs rush to refinance before Global ABS

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Two refis, two resets and one new issue squeezed through on the day before the conference

Five European CLOs priced on Friday in a last-minute rush to market ahead of the Global ABS conference in Barcelona this week.

The small wave of deals included two resets, two refinancings and one new issue by Investcorp. Activity in May was otherwise dominated by new CLOs — 13 new issues had priced by last Thursday, but only three resets.

Jefferies priced two of Friday’s resets, by Hayfin and Trinitas, and a partial refinancing for Invesco. Deutsche Bank was the arranger of a refinancing by Apollo’s Redding Ridge platform and a new deal by Investcorp.

Reset tightens from original

Hayfin issued the €351m reset of its Emerald CLO X with a short non-call period of one year and a reinvestment period of two years. This debt investor-friendly feature may have contributed to the relatively tight pricing of the triple-A tranche at 135bp over three month Euribor.

The manager originally issued the deal in August 2022 at 170bp. Hayfin achieved the most significant tightening on the single-A tranche with 280bp in the reset. It initially issued the notes 150bp wider at 430bp.

However, the double-B notes came wider in the reset (720bp) than in the original CLO (686bp). Hayfin marketed the reset with a single-B tranche at 1,000bp, but did not make the final spread public. According to market sources, the tranche was issued with a turbo feature, which means it will be repaid faster.

Just one new deal

Trinitas printed a €436.2m reset of its Euro CLO III with a non-call period of 1.5 years. The triple-As landed at 146bp, within the 145bp-148bp range where most deals by established managers landed this month.

Trinitas, the European CLO platform of WhiteStar, is transitioning from an emerging manager to a seasoned issuer. It priced its seventh new deal in early May at 149bp.

Invesco refinanced the single-A, triple-B and double-B tranches of its Euro CLO VIII in a €69.4m deal. All three tranches were priced at or slightly tighter than Hayfin’s levels.

Deutsche Bank priced the only new deal of the week, Investcorp’s €510.9m Harvest CLO XXXII. The triple-As came at 145bp, which was in line with recent deals by Barings and GoldenTree, solidifying the tightening in May. From the single-As down to the single-Bs, Investcorp achieved some of the tightest spreads since early May.

The deal had a slightly longer non-call period than most recent CLOs with 1.75 years.

Apollo refinanced the double-A and triple-B tranches of its RRE 12 Loan Management CLO at 220bp and 575bp respectively.

Upcoming deals

While activity is expected to be low during the Global ABS conference, at least two more deals are in the pipeline.

ICG is working on its first European new issue of the year. Investors were told to “call desk” for triple-A guidance.

Bain Capital is marketing a deal with price talk of 143bp-144bp on the AAA tranche. This would mark further tightening of the market inside the 145bp threshold.

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