American Money Management Corp.’s (AMMC) latest collateralized loan obligation (CLO) includes a $240 million delayed draw tranche, according to Fitch Ratings.

Fitch has assigned a preliminary rating of ‘A’ to the tranche.

The Royal Bank of Scotland is the underwriter.

The facility closed on Tuesday with an initial investment of $30 million from the equity holders;  the class A delayed draw notes have an outstanding balance of $0. However, the class A noteholders may  advance funds in $5 million increments, with total outstanding advances capped at $240 million, during the two-year ramp up period.

Credit enhancement for class A will vary between 85.7% and 15% as additional advances are made, according to Fitch. It said the average credit quality of the indicative portfolio is 'B/B-', which is comparable to recent CLOs.

 

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