Babson Capital Management is in the market with a $512 million CLO.

The $342 million senior-most tranche A1 has been rated 'AAA' by Standard & Poor’s. It has a coupon of Libor plus 123  basis points, according to a person familiar with the transaction.

The deal, which is backed by a revolving pool consisting primarily of broadly syndicated, speculative grade senior secured term loans, also includes a $37 million tranche A2, a $42 million tranche B, a $22 million tranche C, an $18 million tranche D and $50.8 million of subordinated notes.

Babson CLO Ltd. 2011-1, which is a refinancing of a Babson CLO Ltd 2008-1, is expected to close Aug. 9, according to a presale report S&P published this week.

The deal has a two-year non-call period and a three-year reinvestment period. The stated maturity is Sept. 28 2021.

Citigroup Global Markets is the arranger.

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