BNY Mellon capitalises on CLO recovery
18 December 2013 London
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BNY Mellon has been appointed trustee and portfolio administrator on Avoca Capital CLO X Limited, a €311 million collateralised loan obligation (CLO).
The facility is managed by Avoca Capital and arranged by Credit Suisse. Avoca Capital and BNY Mellon have worked together on a number of previous deals, which include managed accounts, a CLO and a private equity structure.
BNY Mellon was the largest corporate trust provider by deal count for CLOs and collateralised debt obligations (CDOs) issued worldwide in the first nine months of this year—acting on 47 of the 156 deals to market.
“The European CLO market has recovered this year, for the first time since the financial crisis”, said Dean Fletcher, head of EMEA corporate trust at BNY Mellon.
“This is due to a convergence of factors: bond buying from central banks is providing more liquidity; record low interest rates are forcing investors to seek out higher yields; and the tightening of CLO spreads is making arbitrage more attractive. The senior tranche of Avoca Capital CLO X Limited is priced at 140 basis points above the Euro Interbank Offered Rate, which is one of the tightest spreads in the European CLO market.”
Joe Duffy, country executive for BNY Mellon in Ireland, said: “This deal is testament to the strength of the Irish financial industry. Avoca Capital, which is a Dublin-based company, is at the forefront of the re-emergence of the CLO market in Europe. Through our Irish operations, BNY Mellon offers a comprehensive range of services to support such transactions.”
BNY Mellon will also act as custodian, account bank, cash manager, paying agent, transfer agent and registrar, corporate services provider, warehouse administration agent and ECB reporting agent for Avoca Capital CLO X Limited.
The facility is managed by Avoca Capital and arranged by Credit Suisse. Avoca Capital and BNY Mellon have worked together on a number of previous deals, which include managed accounts, a CLO and a private equity structure.
BNY Mellon was the largest corporate trust provider by deal count for CLOs and collateralised debt obligations (CDOs) issued worldwide in the first nine months of this year—acting on 47 of the 156 deals to market.
“The European CLO market has recovered this year, for the first time since the financial crisis”, said Dean Fletcher, head of EMEA corporate trust at BNY Mellon.
“This is due to a convergence of factors: bond buying from central banks is providing more liquidity; record low interest rates are forcing investors to seek out higher yields; and the tightening of CLO spreads is making arbitrage more attractive. The senior tranche of Avoca Capital CLO X Limited is priced at 140 basis points above the Euro Interbank Offered Rate, which is one of the tightest spreads in the European CLO market.”
Joe Duffy, country executive for BNY Mellon in Ireland, said: “This deal is testament to the strength of the Irish financial industry. Avoca Capital, which is a Dublin-based company, is at the forefront of the re-emergence of the CLO market in Europe. Through our Irish operations, BNY Mellon offers a comprehensive range of services to support such transactions.”
BNY Mellon will also act as custodian, account bank, cash manager, paying agent, transfer agent and registrar, corporate services provider, warehouse administration agent and ECB reporting agent for Avoca Capital CLO X Limited.
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