Citigroup has completed pricing on the latest CLO to hit the market, raising a $408.7 million fund to be managed by WCAS Fraser Sullivan Investment Management, according to a source familiar with the transaction.
The Fraser Sullivan CLO VI includes a $265 million A-1 tranche that pays a coupon of Libor plus 165 basis points, a bit wider than the $407 million Atrium VII CLO priced by Credit Suisse earlier in the month. That CLO, managed by Credit Suisse Asset Management, includes a $253 million triple-A tranche priced at Libor plus 155 basis points. GreensLedge Capital Markets and Mitsubishi UFJ Securities also worked on the CSAM deal, which was one of a number of CLOs that stalled over the summer due to the broader economic turmoil.
Another deal launched earlier in the year — the $400 million Ares XXIII CLO, to be managed by Ares Management — has also been reported as close to pricing. Goldman Sachs is the bank on the transaction.
The Fraser Sullivan CLO VI also includes a $16 million A-2 tranche priced at Libor plus 290 basis points; a $36.30 million B tranche at Libor plus 350 basis points; a $18.3 million C tranche priced at Libor plus 450 basis points; a $19.6 million D tranche priced at Libor plus 550; and $53.49 million of subordinated notes. The 11-year deal has a three-year reinvestment period, which is in line with the Credit Suisse CLO.
Prices widened late in the summer as concerns about the European sovereign crisis and a possible United States debt default peaked. CLOs priced prior to September contained triple-A tranches at around Libor plus 125 basis points.