Merrill Lynch brought to market last week the $366 million Emporia Preferred Funding II - a collateralized loan obligation managed by Cohen Brothers subsidiary Emporia Capital Management and backed primarily by middle-market loans.

The market priced the deal relatively wide, with the triple-A tranche pricing at 29 basis points over Libor and the triple-B tranche at 195, according to JPMorgan Securities. The middle-market loan sector has been increasingly sought after by some CLO managers because of its relatively high yield (ASR, 04/17/06).

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