CIFC Asset Management is in the market with its fifth collateralized loan obligation of the year, according to Fitch Ratings.
RBC Capital Markets is the arranger.
Fitch plans to assign an AAA’ rating to the senior, $307 million tranche of notes to be issued by the deal, CIFC Funding 2014-V. This class benefits from subordination of 35.1%. In its presale report, the rating agency notes that this credit enhancement is less than the average of senior tranches of recently issued CLOs; however, cash flow modeling indicates performance in line with other triple-A notes.
Fitch does not plan to rate the class A-2, B, C, D-1, D-2, E-1, E-2, or F notes, or the subordinated notes.
Net proceeds from the issuance of the secured and subordinated notes will be used to purchase a portfolio of approximately $550 million of primarily senior secured leveraged loans. The CLO will have a four-year reinvestment period and will be non-callable for approximately two years.
According to Fitch, the average credit quality of the indicative portfolio is 'B/B-', which is comparable to recent CLOs.
