CIT Asset Management is preparing a rare sterling-denominated CLO, according to a presale report published by Standard & Poor’s.
Deutsche Bank Securities is the arranger.
The deal, CIT CLO 2013-1, will issue £134.56 million of floating-rate notes. The senior, £93.31 million class of notes is being marketed at six-month Libor plus 175 basis points; it benefits from subordination of 58.24% and is rated ‘AAA.’
A £19.24 million, ‘AA’ rated class of notes is being marketed at Libor plus 250 basis points and a £22.01 million, ‘A’ rated class is being marketed at Libor plus 400 basis points.
A £88.91 million class of subordinated notes is unrated by S&P and is apparently being retained by the issuer, as no spread is indicated in the presale report.
The notes are backed by a static pool of broadly syndicated corporate loans. As of Oct. 4, the issuer had identified 100% of the collateral, some of which are U.S. dollar or euro-denominated.
The European CLO market has taken off this year, but most deals have been dominated in euros, the currency in which most of their assets are denominated. A few deals have had individual tranches of sterling-denominated notes.
This appears to be CIT’s first European CLO; as of June 2013, the firm had two U.S. collateralized loan obligations rated by Standard & Poor's totaling $601 million.