INVESTCO Senior Secured Management Inc. last week closed a collateralized loan obligation transaction to fund two new investment vehicles - Avalon Capital Ltd. II and Avalon Capital Corp. II - but the group is still in the process of buying more loans.

Both CLO funds issued a portion of the two 12-year floating rate notes - $513 million of class-A notes, rated Aaa by Moody's Investors Service, and $85 million of class-B subordinated notes, rated Baa2. The deal was underwritten by PaineWebber.

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