Bank of America Corp. (BAC:US) raised an $802 million collateralized loan obligation for a unit of Credit Suisse Group AG and Prudential Financial Inc.’s investment arm sold a $624 million CLO with Goldman Sachs Group Inc.
The fund for Credit Suisse Asset Management is the largest deal backed by widely syndicated loans to be raised this year, according to data compiled by Bloomberg. The CLO includes a $300 million slice rated AAA that pays a rate of 137 basis points more than the London interbank offered rate. The CLO for Prudential Investment Management includes a $386.4 million slice graded AAA that pays a rate of 138 basis points more than
CLOs, a type of collateralized debt obligation that pool high-yield, high-risk loans and slice them into securities of varying risk and return, have raised $41 billion this year, up from $11.7 billion sold in all of 2011, Bloomberg data show. As much as $70 billion of the funds are expected to be sold next year according to panelists attending a structured credit roundtable hosted by Standard & Poor’s.
“With the U.S. facing a potential fiscal cliff and Europe dealing with its debt crisis, the biggest risks facing the U.S. collateralized loan obligation market are macroeconomic,”according to a statement released by the ratings firm yesterday.
Morgan Stanley raised a $440 million collateralized loan obligation for Halcyon Asset Management LLC. The CLO includes a $278 million slice rated AAA that has a coupon of 143 basis points more than Libor.
3i Group Plc (III) is planning to more than double its debt- management unit and hired Melissa Tessier from Cantor Fitzgerald LP as Britain’s biggest publicly-traded private-equity firm moves away from investing in buyout deals. Tessier will report to Andrew Bellis, a partner and managing director at 3i Debt Management, according to an e-mailed statement from the company.
FleetPride Inc., a distributor of heavy-duty truck and tailer parks, increased the interest rate it will pay on $625 million of loans backing its buyout by TPG Capital, Bloomberg data show. A $425 million, seven-year first-lien term portion will pay interest at 4 percentage points more than Libor up from 3.75 percentage points. A $200 million, 7 1/2-year second-lien term loan will pay interest at 8 percentage points, compared with a range of 7.75 percentage points to 8 percentage points more than Libor previously offered.
Patheon Inc. (PTI), a provider of manufacturing and drug development services, set the interest rate it will pay on a $565 million covenant-lite term loan B backing its acquisition of Banner Pharmacaps Inc., according to Bloomberg data. The seven-year debt, will pay interest at 5.5 percentage points to 5.75 percentage points more than Libor.
Viacom Inc. (VIAB:US), the media company that owns the Paramount film studio and cable networks such as Nickelodeon and MTV, increased the size of a revolving credit line to $2.5 billion and extended the loan by two years.
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