Morgan Stanley isn’t the only bank marketing a CLO this week; its competitors are shopping at least four other deals.
Citigroup is arranging a $408.8 million CLO for Babson Capital Management. As its name suggests, Babson CLO 2012-II is the firm’s second CLO of the year. It includes a $255 million class A-1 tranche that is provisionally rated 'AAA' by Standard & Poor’s.
The tranche priced at Libor plus 130 basis points, according to a presale report.
The deal, which is expected to close May 25, has a four-year reinvestment period and is non-callable for three years. At least 95% of the collateral will be invested in senior secured loans.
Babson manages a total of 12 CLOs, not including this proposed deal.
RBS Securities is arranging a $308 million CLO for Crescent Capital Group. The Atlas Senior Loan Fund includes a $191 million class A1L tranche that is provisionally rated AAA by S&P. It is priced at Libor plus 132 basis points, according to a presale report.
The transaction, which is expected to close in June, has a four-year reinvestment period and a two-year non-call period. S&P said that, as of May 15, 2012, the issuer had not committed to purchase any of the identified assets that form the portfolio's collateral. However, the issuer had identified approximately 70% of the total assets expected to be acquired.
At least 95% of the collateral will be invested in broadly syndicated, senior secured corporate loans.
Crescent has managed 18 structured loan funds since 1993 totaling $7.8 billion.
JPMorgan Securities is arranging a $399 million CLO for BlueMountain Capital Management. BlueMountain CLO 2012-1 includes a $254 million class A tranche rated 'AAA' by Moody’s Investors Service.
The deal, which is expected to close June 13, is non-callable for two years and has a four-year reinvestment period, according to a presale report. The portfolio consists of a minimum of 90% first-lien senior secured loans.
Moody’s has also assigned provisional ratings to over $200 million of notes to be issued by another transaction, Sugar Creek CLO. The ratings agency expects to assign AAA ratings to the $180 million of class A notes issued by the trust.
At least 95% of the CLO’s portfolio must be invested in senior secured loans or eligible investments. Moody’s said the underlying collateral pool is expected to be 80% ramped up as of the closing date, which it did not provide.
Together with the $470 million CLO Morgan Stanley is arranging for LCM Asset Management, there are at least five deals being marketed. In a research note this week, Howard Esaki, global head of structured finance research at S&P, said CLO issuance for the year will soon reach $12.4 billion from 29 deals. That’s roughly the same volume as was seen for all of 2011. By comparison, at this time last year, issuance was just $1.6 billion.