ACIS Capital Management is prepping a $849.43 million collateralized loan obligation, according to a presale report from Standard & Poor’s.
Jefferies is the lead arranger.
The transaction is expected to buy the majority of its initial collateral from an existing CLO that was issued in 2006 and matures next month. The seller, Highland Credit Opportunities CDO, is managed by ACIS’ affiliate Highland Capital Management. It is also rated by S&P.
The new deal, ACIS CLO 2013-2, has a $388 million senior class with a preliminary ‘AAA’ rating that pays interest of Libor plus 50 basis points. That is notably lower than rates on similarly-rated tranches other recent deals, which have been more than twice as wide. S&P noted in the presale report that the lower spread may reflect the deal’s short reinvestment period, which ends in April 2015. The deal is also callable in April 2015.
On any day after the non-call period, the issuer may redeem and refinance any class or classes of notes, in whole but not in part, as long as certain conditions are satisfied, according to S&P.
