Barclays is offering to buy pieces of a CLO it arranged, which is managed by Lambda Finance, at a price as low as 20% of face value, according to Bloomberg.
Barclays is offering a minimum of 70% of face value for the top-rated notes and 20% for the junior debt. The Lambda CLO is a $5.7 billion synthetic instrument comprised of loans made to small and medium-sized companies in the U.K.
Barclays is just the latest bank trying to take advantage of the dislocation in the market by buying back CLO assets it holds. HSBC in April purchased $763 million of a CLO it arrangedmanaged by Metrix Groupat a steep discount.
In a statement, Barclays said it reserves the right, in its sole discretion, to decide the maximum aggregate principal amount outstanding of notes which it will accept for purchase. Investors have until June 19 to offer their Lambda notes to Barclays. The price for each portion of notes will be set using a modified Dutch auction.