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.
