TELOS Asset Management is marketing a $365.25 million collateralized loan obligation dubbed TELOS CLO 2013-4, according to a Standard and Poor's presale report.
BNP Paribas Securities is the initial purchaser and placement agent on the transaction.
The CLO is actively-managed and backed by a revolving pool consisting primarily of broadly syndicated speculative-grade senior secured loans. The pool has 128 obligators with an average obligator holding of 0.78%.
The largest obligator holding is $5.99 million, or 1.71%, in the business equipment and services industry. Other industries represented include: health care, utilities, retailers (except food and drug), oil and gas, financial intermediaries, and aerospace and defense.
S&P assigned preliminary 'AAA' ratings to the $217.5 million total class X and A notes. It rated the $46.5 million B notes 'AA'; the $29 million C deferrable notes 'A'; the $19.25 million D deferrable notes 'BBB'; and the $16 million E deferrable notes 'BB'. S&P did not rate the $37 million subordinate notes.
The A notes are being marketed at three-month Libor plus 130 basis points, wider than recent CLO deals, which have priced at 125 basis points. The X notes are being marketed at three-month Libor plus 95 basis points; the B notes at 180 basis points; the C notes at 275 basis points; the D notes at 350 basis points; and the E notes at 500 basis points.
Credit enhancement is provided to the senior notes through the subordination of cash flows that are payable to the subordinated notes.
TELOS, the collateral servicer, is able to purchase covenant-lite loans for up to 50% of the collateral pool and current-pay obligations for up to 2.5%, which can lower expected recoveries according to S&P.
This will be the fourth CLO TELOS, formerly Tricadia Loan Management, manages.