Tikehau Capital Europe’s first CLO priced last week, a source close to the matter said. Goldman Sachs priced the AAA tranche of the €354.7 million CLO at 140bps, slightly wider than the market range of roughly 130 bps at present, which could reflect a new manager premium, analysis from Deutsche Bank found.
The collateral in the sponsored CLO is large-cap syndicated loans and Tikehau will hold a five percent strip of the CLO equity tranche, in line with skin in the game risk retention rules and requiring significant capital from its balance sheet.
The CLO marks an expansion of Tikehau Capital’s leveraged credit business. The firm plans to build the CLO under management business to between €1 and €2 billion in the next two years, PDI understands.
The new platform, part of Tikehau Investment Management, is headed by Debra Anderson, previously a senior managing director at Blackstone’s credit arm GSO Capital who helped establish the firm’s CLO business. Tikehau Investment Management also invests in private debt, high yield strategies and equities. Tikehau Capital has around €5 billion in assets under management as of 31 December 2014.
Moody’s and Fitch rated the CLO, which has a non-call period of two years and a reinvestment period of four years. The stated maturity of the CLO is 13 years and it will pay quarterly or semi-annually in the case of a frequency switch event.
The €161 million Class A-1 Aaa / AAA rated notes priced at 99.75 paying Euribor plus 1.35 percent; the €40 million Class A-2 fixed / floating Aaa / AAA rated notes priced at 100 paying 1.88 percent / Euribor plus 1.4 percent; the €39 million Class B Aa2 / AA rated notes, priced at 99.7 paying Euribor plus two percent; the €20 million Class C A2 / A priced at 100 paying Euribor plus 2.9 percent; the €18 million Class D Baa2 / BBB rated notes priced at 96.6 paying Euribor plus 3.25 percent; the €25 million Class E Ba2 / BB rated notes priced at 92 paying Euribor plus 4.6 percent; the €10 million Class F B3 / B- rated notes priced at 91.1 paying Euribor plus 5.9 percent. There is also a subordinated secured tranche of €41.7 million.
Tikehau declined to comment.