Private equity firm Cerberus Capital Management is marketing its third collateralized loan obligation, according to a presale report from Moody’s Investors Service.
Wells Fargo Securities is the underwriter.
Cerberus Onshore II CLO is backed by $450 million of loans to small and medium sized companies. There are two senior tranches with preliminary AAA’ ratings; the $182 million A-1 tranche is being offered at three-month Libor plus 200 basis points and the $25 million A-2 tranche has a step-up coupon: it pays Libor plus 150 basis points for the duration of the CLO’s reinvestment period and Libor plus 250 basis points thereafter.
The reinvestment period ends in May 2015.
An affiliate of Cerberus Capital Management, L.P., Cerberus Levered Loan Opportunities Fund II, L.P., will manage the CLO.