Apollo is in the market with a $400 million CLO that was arranged by JPMorgan.

The CLO, named ALM Loan Funding 2010-3 Ltd. will be managed by Apollo Credit Management and will consist of a $262 million triple-A-rated tranche, a $20.5 million double-A-rated tranche, a single-A-rated tranche and a triple-B-rated tranche. There is also an equity tranche, however, that piece is not being offered to investors.

Price talk on the triple-A-rated tranche is at Libor plus 175 basis points, while price talk on the double-A-rated tranche is at Libor plus 300 basis points. The single-A-rated tranche is being talked between Libor plus 325 basis points and Libor plus 400 basis points, while the triple-B-rated tranche is being talked between Libor plus 425 basis points and Libor plus 600 basis points.

During October, the CLO will be marketed to investors, with the final pricing expected by the end of the month or the beginning of November. The deal is expected to close in November or December. The CLO will be about 85% ramped up when it closes, with an expected six-month ramp-up period, according to Standard & Poor’s.

The CLO matures in 10 years and has a two-year reinvestment period. Its triple-C basket is 7.5%, while its bucket limit for debtor-in-possession and senior bonds is 7.5% and 10%, respectively, according to S&P. Its basket limit for secured floating-rate notes is 2.5%.

Earlier this year, Apollo priced the $325 million ALM Loan Funding 2010-1 LTD CLO, which was arranged by Citigroup. That vehicle consists of a $215 million tranche of triple-A-rated loans that priced at Libor plus 170 bps; an $11.1 million tranche of double-A-rated loans that priced at Libor plus 225 bps, with a discount of 96.11; a $24.7 million tranche of single-A-rated loans that priced Libor plus 230 bps, with a discount of 91.44; and a $72 million equity tranche.

Overall, there have been more than $1.3 billion of U.S. CLOs arranged so far this year, sources said. That is $100 million more than the CLO volume in 2009.

During the summer, Bank of America Merrill Lynch and Wells Fargo each arranged a $300 million CLO. The BofA CLO is managed by LCM Asset Management, which is a unit of Tetragon Financial Group, and consists of a $212 million triple-A-rated tranche and a $47 million unrated tranche.

The Wells Fargo CLO is managed by Golub Capital and largely consists of midmarket loans from Golub’s balance sheet. Approximately $240 million of the vehicle is made up of loans from Golub’s book, while $60 million was earmarked to purchase new loans.

In March, Citi priced a $525 million CLO managed by an affiliate of WCAS Fraser Sullivan Investment Management. That vehicle — the COA Tempus CLO Ltd — consists of a $343.25 million tranche of triple-A-rated loans, a $15.75 million tranche of double-A-rated loans, a $38.25 million tranche of single-A-rated loans, and a $115.5 million equity portion, bringing the total to $512.75 million.

Later that month, BofA arranged a $500 million CLO managed by Symphony Asset Management and dubbed the Symphony CLO VII fund. Moody’s Investors Service assigned an Aaa rating to a $317 million tranche, and a Ba2 rating to a $113 million tranche.

And in May, Goldman Sachs arranged a $450 million CLO managed by Doral Money, with Babson Capital Management as the collateral advisor.

“Look at LBO volume and CLO formation charts are inclined at same steepness,” said a New York-based banker. However, “the formation of new money is both slower.”

Separately, Apollo is raising money for a closed-end loan fund. The fund, the Apollo Senior Floating-Rate Fund, will invest 80% of its assets in senior secured loans

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