Allianz Global Investors is marketing a $413 million collateralized loan obligation, according to Fitch Ratings.
Nomura Securities International is the arranger.
West CLO 2014-2 will issue three classes of notes with preliminary AAA’ ratings from Fitch and six classes of unrated notes. The $200 million class A-1a is being marketed at three-month Libor plus 155 basis points and the $56 million class A-1b at a fixed rate of interest of 3.455%. Both benefit from credit enhancement of 36%; Fitch noted in its presale report that this is below the average for recent CLO issuances.There is also a $3.75 million class X being marketed at Libor plus 100 basis points. It is expected to be paid in full from interest proceeds by January 2018.
Net proceeds from the issuance of secured and subordinated notes will be used to purchase a portfolio of approximately $400 million of primarily senior secured leveraged loans. Like most CLOs printed since December 2013, West CLO 2014-2 is not permitted to purchase of bonds and letters of credit, which could put it off limits to bank investors.
The CLO will have a four-year reinvestment period and will be non-callable for two years