Ares Management is prepping its latest collateralized loan obligation, the $412.80 million Ares XXVII CLO, which will bring the total amount of broadly syndicated collateralized loan obligations Ares manages to roughly $14.11 billion, according to a presale report from Standard and Poor's.
Goldman Sachs is arranging the deal, which is set to close today.
Ares XXVII is a managed cash flow CLO backed by a revolving pool consisting primarily of broadly syndicated senior secured loans.
The pool includes 140 obligators with an average holding of 0.71%.
S&P assigned preliminary 'AAA' ratings to the class A-1 and A-2 notes totaling $249 million. The $46 million B notes, $34 million deferrable C notes, $22 million deferrable D notes, and $17.8 million deferrable E notes are rated 'AA', 'A', 'BBB', and 'BB', repectively. S&P did not rate the $44 subordinated tranche.
The A-1 notes are being marketed at three-month Libor plus 125 basis points, in line with other recently price CLOs. The A-2 notes are being marketed at three-month Libor plus 100 basis points during the first 18 months, 150 for the following 12 months, and 175 thereafter. The B, C, D, and E notes are set at three-month Libor plus 180 basis points, 275 basis points, 375 basis points, and 485 basis points, repectively.
S&P noted that Ares can purchase current-pay obligations for up to 2.5% of the collateral pool, enter into hedging transactions, enter into trading plans to satisfy the reinvestment guidelines, vote in favor of any waiver, modification, amendment, or variance that would extend a collateral obligation's maturity, and reclassify up to $4 million in principal proceeds as interest proceeds on the first determination date.
Just earlier this month, Ares closed a €300 million CLO called Ares European CLO VI.
