Deutsche Bank is marketing a $500 million collateralized obligation (CLO) for Western Asset Management Co. (WAMCO), according to rating agency reports.

The deal, Mountain Hawk II CLO, includes two senior tranches of notes with a preliminary ‘AAA’ rating from Moody’s Investors Service and Standard & Poor’s; the $270.5 million Class A1 notes and $53 million of Class A2 delayed-draw notes. Both are being offered at an interest rate of three-month Libor plus 116 basis points; however the delayed-draw notes will receive that rate only on the portion drawn and a commitment fee on the remainder.

Moody’s lists as a credit concern in its presale report the fact that the trust has yet to acquire any of the deal’s targeted portfolio. It is expected to acquire 50% of the collateral by the time the transaction closes in July.

S&P has also assigned preliminary ratings of ‘AA’ to $52 million tranche being marketed at Libor plus 170 basis points and a $20 million tranche offered at a fixed rate of 3.27%.

The deal also includes a fixed-rate and a floating-rate tranche with preliminary ‘A’ ratings from S&P totaling;  a ‘BBB’-rated, floating-rate tranche and a ‘BB’-rated, floating-rate tranche.

Like many recently issued CLOs, Mountain Hawk II has a large bucket for covenant-lite loans: 60%.

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