Northwest Farm Credit Services recently closed a $57 million synthetic CLO, referenced to U.S. government agency subsidized loan payments to farming operations in the Pacific Northwest. The structure of the deal offered investors a wide array of credit risk, from super-senior down through speculative-grade classes, which priced with a four-digit spread to Libor.
Led by Banc of America Securities and rated only by Moody's Investors Service, the reference pool was described as first-lien real estate-secured agribusiness loans to high-quality credits. More than 60% of the loan obligors have FICO scores in the 600 to 850, and the loans are seasoned 41 months on average. Loans seasoned less than three months are restricted from the reference pool.