CVC Credit Partners European CLO Management is issuing its second European CLO of 2017 with CVC Cordatus Loan Fund IX, a €415.1 million transaction. The deal will market €235.2 million in notes through its triple-A tranche that will be priced 85 basis points above three-month and six-month Euribor (currently -0.33% and -0.27%, respectively).
CVC is launching the transaction with €233.4 million of its identified collateral concentrated in the hotel/gaming & leisure (13.7%), healthcare/pharmaceuticals (12.9%) and chemicals/plastics (10%) sectors, and with a weighted average spread of 3.92%.
The identified portfolio’s weighted average life of only 5.9 years means CVC would need to add longer-term maturity assets (which can include up second-lien loans and secured senior and high-yield bonds up to a 7.25% limit) to reach Moody’s base case assumption of an eight-year transactional life.
The latest deal is CVC’s ninth managed Euro CLO, and follows a February issuance of CVC Cordatus Loan Fund VIII, a €415.6 million transaction through Goldman Sachs that had a AAA coupon spread of 93 basis points above Euribor. Not including the latest deal, the manager now oversees $16.4 billion in assets under management.
In August, only two deals priced in the European CLO market. Bain Capital Credit closed on its €362.5 million Bain Capital Euro CLO 2017-1, while Och Ziff Capital Management finalized the €415.3 million OZLME 2017-2 transaction, according to Thomson Reuters LPC.