LCM Asset Management priced a $418 million collateralized loan obligation, bringing issuance for the year to date to $40.6 billion, according to Standard & Poor's.
The deal, LCM XIV Limited Partnership, includes a $250 million Class A of notes with a preliminary ‘AAA’ rating and a yield of Libor plus 115 basis points. That was in line with recent deals. Credit enhancement for the class of 37.5% is also in line with recent deals, according to ratings agency presale reports.
Bank of America Merrill Lynch was the lead arranger.
Fitch Ratings said in its report that the average credit quality of the indicative portfolio is slightly above ‘B’, which represents slightly higher credit quality than most recent CLOs.
June issuance is about $5.5 billion across 11 deals, up modestly from $4.9 billion in May, according to S&P. Monthly volumes have dropped in the second quarter from the first quarter, but participants are still expecting issuance could reach upwards of $70 billion by year's end.
With $4.3 billion in assets under management as of Dec. 31, 2012, LCM is a specialist in the leveraged loan market with experience managing 18 CLOs 2001.