Invesco Senior Secured Management has priced a new $406.25 million CLO with a high ratio of first-lien secured loans already identified for the portfolio.
According to a presale report issued by Moody’s Investors Service, Upland CLO Ltd. includes two ‘Aaa’-rated tranches split between fixed-rate and floating-rate. The $235 million Class A-1A notes are priced at 160 bps over Libor, while the $25 million Class A-2A fix-rate notes carry a 2.991% coupon.
The portfolio, which has a subordinated equity level of $38.25 million, is structured almost entire of first-lien senior secured loans totaling 98.4% in the identified portfolio totaling $362.7 million. The Class A notes are supported by 35% subordination and an initial overcollateralization level of 153.8% (well above the default par ratio trigger of 102.5%).
The weighted average rating factor (WARF) of 2579 is on par with other recent CLO issues, including the Neuberger Berman CLO XXI that sold notes in March. WARF is determined by assigning and averaging the numbers corresponding to ratings of individual loan assets within a collateralized debt securitization [on a scale of 1 (‘Aaa’) to 10000 (‘Ca) with the highest speculative-grade rating (‘Ba1’) assigned 940].
The top five industries in the identified portfolio total 44.7% of the pool’s assets, led by beverage, food & tobacco (10.3%), high tech industries (9.8%), telecommunications (9.5%) and healthcare (7.6%).
Invesco has $28.3 billion of assets under management, including $6.4 billion in CLO assets which places the firm in the mid-20s rang on league tables for CLO investment managers.
Some of its recent CLO transactions including 2014 deals through Limerock CLO II sized at $641.8 million, Limerock CLO III at $492.7 million and A Voce CLO at $590.8 million.