Prudential Investment Management is preparing a $650 million collateralized loan obligation, according to a presale report by Moody’s Investors Service.
The deal, Dryden 34 Senior Loan Fund, will be backed by a broadly syndicated portfolio of corporate debt only. The portfolio will consist of at least 90% first-lien senior secured loans. Approximately 75% of the portfolio is expected to be ramped at closing, but currently Prudential has acquired less than 10% of the pool.
Moody’s assigned preliminary Aaa’ ratings to the $409.5 million of class A notes, which will be offered at 143 basis points over three-month Libor. The notes will benefit from an effective subordination of 37% and will mature in October 2026.
Both the two-year, non-call period and four-year, reinvestment period are in line with other recent CLOs on the market.
Credit Suisse is the underwriter for the transaction.
Prudential’s last Senior Loan Fund CLO was the $811.75-million Dryden 33 Senior Loan Fund, issued in May. Standard & Poor’s rated the $504 million class-A, senior-secured, floating-rate notes AAA.’ The notes mature in July 2026. The transaction is collateralized by a revolving pool of primarily broadly syndicated senior secured loans.
Prudential Investment Management, a multi-product investment adviser specializing in CLO portfolio management and high-yield/bank loan investment management, has approximately $418 billion in assets under management as of March 31, 2014. The global leverage finance team covers the U.S. and European public and private loan issuers.