European Firm Permira Enters US CLO Market as Issuance Booms
Source: Live Mint
European buyout firm Permira is debuting its first deal in the $1 trillion US collateralized loan obligation market, as deals near an issuance record.
The investment firm priced the $430.6 million deal on Friday, according to a person with knowledge of the matter. CLOs, the largest buyers of leveraged loans, repackage this debt into securities of varying risk and size. The offering, arranged by JPMorgan Chase & Co., is part of Permira’s effort to grow its footprint in the US through such vehicles, said the person, who asked not to be identified discussing private information.
A representative for Permira declined to comment.
Funds are issuing CLOs at near record levels, with almost $183 billion worth of deals in the US so far this year, according to data compiled by Bloomberg. That’s partly because risk premiums on CLO debt started tightening last year, kicking off a surge in transactions known as resets, which give managers of the debt more time to freely buy and sell loans. These funds are also catching up from late 2022 and 2023, when a drop in bond sales led to a slowdown in new vehicles.
Permira also priced a roughly €400 million European CLO on Friday, the person said, marking its fifth such deal so far this year. It also has a warehouse open for European leveraged loans, according to data compiled by Bloomberg.
Founded in 2008, Permira’s credit platform manages about €17 billion of assets. Its CLO strategy is run by its co-head of Permira Credit, Ariadna Stefanuscu.
The firm is one of a few trying to push into the US market for CLOs and other structured deals. Hedge fund Arini and Sona Asset Management, both mostly based out of Europe, have hired staff either focused on US leveraged loans or CLO bonds this past year. In the US, hedge fund Chatham Asset Management also recently launched a CLO platform to dive into the market.
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