Barclays is looking to buy up notes in ACA CLO 2005-1, a CLO managed by Apidos Capital Management, in an apparent effort to exercise the deal’s call option.
The bank has released an offer sheet, giving noteholders a deadline of Feb. 17 at 5 p.m. EST to respond. To move things along, Barclays has also assigned an early tender premium to the equity notes. If existing equity holders accept the bank’s offer by Feb. 2, the tender price will be 70 cents, compared with 63 cents after this date.
The bank is the sole holder of the CLO’s $207 million triple-A tranche and holds $8 million of equity in the fund. In addition to the equity, the offer includes four tranches of mezzanine notes, from A-2 to B-2. Barclays has stated that its offers are subject to certain conditions, one of them being that at least $4 million of subordinated notes are tendered. This would take the bank’s equity holding to just over $12 million, or 50%, of the total tranche.
It appears as though the bank is looking to gain control of the deal for the purpose of calling and liquidating it. A spokesman for Barclays declined to comment.
Citigroup last year sought to gain control of more than $2 billion of CLOs. It tendered offers for the riskiest portions of several synthetic CLOs it set up for asset management firms, including the Blackstone Group, Prudential Investment Management, Silvermine Capital Management and Invesco.