Monroe Capital Prices its 1st Broadly Syndicated CLO

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Monroe Capital has priced its first securitization of broadly syndicated corporate loans Friday, according to a person familiar with the deal.

Like the Monroe’s previous CLO, completed in August, the $412 million Monroe Capital BSL CLO 2015-1 complies with European risk retention rules, allowing it to be marketed to investors on both sides of the Atlantic.

BNP Paribas is the lead underwriter.

Monroe Capital lends primarily to smaller and medium-sized companies, and its previous CLOs have been backed by loans already on its books. By comparison, most managers of broadly syndicated loans acquire collateral for deals from other lenders, either at the time of issuance or in the secondary market.

The latest deal is an illustration of how the lines between broadly syndicated CLOs and middle market CLOs are blurring.

The deal’s $252 million class A notes are rated triple-A by Moody’s Investors Service and Fitch Ratings; they pay 143 basis points over one-month Libor.

The $48 million class B notes ,rated ‘Aa2’ by Moody’s, pay Libor plus 220 basis points; the $21 million class C notes, rated ‘A2’, pay Libor plus 310 basis points; the $24 million class D notes, rated ‘Baa3’, pay Libor plus 395 basis points; the $22 million class E notes, rated ‘Ba3’, pay Libor plus 600 basis points, and the $8 million class F notes, rated ‘B2’, pay Libor plus 700 basis points.

Fitch did not rate any of the subordinated tranches.

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