Standard Chartered launched a $121.5 million partially funded synthetic CLO last week. The bank, listed in Hong Kong and London, says the deal is part of a portfolio management program designed to boost liquidity and increase its origination and growth capacity.
Deutsche Bank Securities arranged the deal, issued out of the Cayman Islands-registered Start CLO SPV, and will jointly handle the sale to investors with StanChart.
The transaction is referenced to a $1.5 billion pool of loans and other obligations extended by the bank to 158 entities, including corporates, financial institutions and sovereign issuers. Around 35% of the borrowers are from the U.S., 42% are from Asia, while only 7.8% of the names are from countries rated single-A minus or lower.
The deal is structured with a three-year replenishment period, during which time StanChart can boost the exposures of names that have been amortized or replace them with new ones.
Fitch Ratings, Moody's Investor's Service and Standard & Poor's have been brought on board to rate the five publicly offered tranches, each of which reach legal maturity in November 2014. The $75 million A class is rated triple-A, the $15 million B tranche is split rated at AAA/AA/Aa2, by Fitch, S&P and Moody's, respectively. The $9 million C class notes AA-/A/A2, while the $9 million D and $13.5 million E tranches are rated triple- and double-B, respectively.
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