Fortress Investment Group is issuing its first collateralized loan obligation since Softbank Group acquired the New York-based hedge fund in December, according to S&P Global Ratings.

S&P has published a presale report on Fortress Credit Opportunities XI, a $702.8 million CLO portfolio backing a fixed- and floating-rate notes issuance of $573 million, the first of the year for Fortress' FCOD CLO Management. The deal raises the manager's CLO assets under management to $9.7 billion involving 37 deals.

Natixis was the placement agent.

The senior-note stack consists of a $216.6 million of Class A-1% notes with a spread of 130 basis points over three-month Libor; a $30 million, 4.03% fixed-rate class of AAA-rated Class A-1F notes; and a $92 million A-1R notes class priced at 130 basis points above a commercial paper benchmark rate to be used by A-1R noteholder Natixis (with the CP rate capped at three-month Libor plus 0.3%).

The A-1R notes are first in the payment waterfall, and all three notes have overcollateralization support in excess of 200%.

The deal includes a two-year noncall period and a five-year reinvestment period.

Fortress’ deal has only a 4.4x leverage, and a portfolio weighted average spread of 6.21%. The deal is expected to close on April 16.

Also filling the middle-market CLO pipeline is Ivy Hill Asset Management, with a $1.01 billion deal of small- and medium-enterprise loans through Ivy Hill Middle Market Credit Fund XIV. The deal is another 2018 debut and brings Ivy Hill’s CLO AUM level to about $3.3 billion, according to S&P.

Ivy Hill will issue $900 million in notes, with its $460 million, AAA-rated tranche priced at 126 basis points over three-month Libor.

Unlike Fortress, which has a 38% share of S&P-rated collateral in its pool, rated debt vehicles make up only 8.64% of Ivy Hill's 96% senior-loan collateral pool.

The weighted average spread is 5.16% with total leverage of 8.22x, with a collateral focus on loans acquired from the internet software services, health care and diversified financial services industries.

Ivy Hill is slated to close its deal May 1.

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