Carlyle Group Prices €300M European CLO

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The pipeline of European collateralized loan obligations (CLO) hasn’t been completely shut down after all.

The Carlyle Group priced a €300 million deal last week, according to a person familiar with the deal. Dubbed Carlyle Global Market Strategies Euro CLO, it consists of three floating-rate and two fixed-rated tranches rated by Standard & Poor’s.

The €180 million, ‘AAA’-rated senior tranche was marketed at six-month Libor plus 180 basis points, according to S&P’s presale report.

The deal priced just one week after the European Banking Authority released a consultation paper that calls into question an interpretation of new risk retention rules.  Deal sponsor are required to hold on to 5% of securitizations, but many participants understood that a third party could hold this exposure, so long as the interest of this holder were aligned with those of the sponsor.

A number of CLOs are said to be on hold as a result.

Unlike many smaller European CLO managers, however, the Carlyle Group, a U.S.-based private equity firm, has deep pockets. CELF Advisors, the affiliate managing Carlyle Global Market Strategies Euro CLO 2013-1, is holding onto subordinate notes equal to 5% of the collateral balance, according to S&P.

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