DFG Investment Advisers has priced its second ever collateralized loan obligation in line with initial price talk, according to someone familiar with the transaction.
The $366.9 million deal, called Vibrant CLO II, is backed primarily by broadly syndicated senior secured loans. It is actively managed.
Deutsche Bank arranged the transaction, which will close Sept. 23, according to the source.
The $214.8 A-1 notes with 41.6% subordination and a weighted average life of 6.2 years have been assigned preliminary 'AAA' ratings from Standard and Poor's. Moody's Investors Service has also rated them 'Aaa' but will not rate any other classes. The agency also only rated the senior-most tranche of DFG's first CLO which closed in January.
Class A-1 is a delayed draw tranche, which will be fully funded within three months from closing. The notes priced at Libor plus 128 basis points. This is tight of the same notes from the DFG's previous issue; they were marketed at Libor plus 148 basis points.
The $35.1 million 'AA' rated A-2A notes with a WAL of 7.1 years priced at Libor plus 175 .
The $10 million 'AA' rated A-2B notes, which have the same WAL as the A-2A notes, priced with a rate of 4.03%. This is the only class to price slightly wide of talk, which was at 3.96%.
The $28.9 million 'A' rated B notes with a WAL of 7.4 years priced at Libor plus 275 basis points.
The $18.8 million 'BBB' rated C notes with a WAL of 7.9 years priced at Libor plus 360 basis points.
The $16.4 million 'BB' rated D notes with a WAL of 8.4 years priced at Libor plus 490 basis points.
There are $11.4 million of subordinated notes.
The collateral pool has 123 obligator with an average holding of .81%.
S&P noted in the presale report that DFG has less than $2.5 billion total assets under management, which could hinder its ability to monitor the underlying assets in the transaction should a potential decrease in fee revenue occur.