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American Capital closes USD414m managed CLO

April 2, 2013 at 4:06 pm

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ACAS CLO 2013-1, an affiliate of American Capital, has closed on the sale of USD414m of collateralised loan obligation bonds. The transaction was arranged by Deutsche Bank Securities.

The CLO is externally managed by American Capital Leveraged Finance Management, a subsidiary of American Capital Asset Management, a wholly-owned portfolio company of American Capital, for an annual management fee of 50 basis points of total assets.

The CLO has primarily invested the proceeds of the bonds in broadly syndicated senior secured loans purchased in the primary and secondary markets.

"We are pleased that we materially improved pricing on the financing of our latest CLO versus the CLO that we raised last September," says Mark Pelletier, American Capital managing director, CDO and CLO Group. "We now manage three CLOs and have investments in the equity of 25 CLOs."

The bonds sold by the CLO included AAA(sf) through B(sf) rated tranches, and a non‑rated equity tranche of subordinated notes. American Capital Leveraged Finance Management purchased USD25.3m of the non‑rated equity tranche of subordinated notes, with third party investors purchasing the remaining USD11m. The retention of an equity investment by American Capital Leveraged Finance Management is intended to make ACAS CLO 2013-1 compliant with risk retention rules applicable to credit institutions regulated in the European Economic Area.