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Anchorage Capital prices; Garrison in CLO pipeline; annual supply to surpass $100 billion
By Cristal Cody
Tupelo, Miss., May 8 – In new primary action, Anchorage Capital Group, LLC brought a $540 million cash flow CDO transaction, according to a market source.
The offering is collateralized primarily by corporate bonds and loans.
According to Moody’s Investors Service, the deal’s structure is generally consistent with CLOs. Some differences include that up to 65% of the portfolio may consist of second-lien loans, unsecured loans, bonds, subordinated bonds and unsecured bonds and up to 100% of the portfolio may consist of fixed-rate notes, Moody’s said.
Impending risk retention regulations prohibit banks from owning CLOs that hold bonds and broadly syndicated CLOs issued in 2015 have complied with the Volcker legislation and are secured primarily by senior secured corporate loans.
Anchorage Capital Group previously sold the $569.93 million broadly syndicated Anchorage Capital CLO 6, Ltd./Anchorage Capital CLO 6, LLC deal on March 11.
Coming up in the pipeline, Garrison Investment Group, LP plans to price a $413.7 million CLO offering.
More than $41 billion of U.S. CLOs have priced year to date, according to data compiled by Prospect News.
CLO issuance is on pace to exceed $100 billion in 2015, Barclays analysts said in a note on Friday.
Loan issuance has picked up and non-retail demand from business development companies has improved in recent weeks, according to the note.
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