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CLO primary quiet; American Capital wraps new European risk-retention compliant CLO
By Cristal Cody
Tupelo, Miss., Aug. 26 – CLO primary activity remained light on Wednesday with sources expecting a slowdown in issuance over the remainder of the month.
Fifth Street CLO Management LLC is in the pipeline with a $416.6 million middle-market CLO deal, Fifth Street SLF II Ltd./Fifth Street SLF II LLC, via Natixis Securities America LLC.
Market sources anticipate less than $8 billion of CLO volume for the month.
In other activity, American Capital, Ltd. announced on Wednesday that it closed on the $510 million European risk-retention compliant ACAS CLO 2015-2, Ltd./ACAS CLO 2015-2 LLC deal, which included $50 million of equity.
The transaction is managed by American Capital Asset Management, LLC subsidiary American Capital CLO Management, LLC.
American Capital CLO Management purchased $29.5 million of the non-rated subordinated notes in the equity tranche, and third-party investors purchased the remaining $20.5 million, according to the release on Wednesday.
“The retention of a control equity investment by American Capital CLO Management, LLC is intended to make ACAS CLO 2015-2 compliant with risk retention rules applicable to credit institutions regulated in the European Economic Area,” American Capital said.
The CLO priced via Wells Fargo Securities, LLC on Aug. 3.
The $225 million senior tranche of class A-1 notes due Oct. 28, 2027 (Aaa//AAA) priced at Libor plus 150 basis points.
Proceeds from the deal were primarily invested in broadly syndicated senior secured floating-rate loans purchased in the primary and secondary markets, American Capital said.
American Capital has priced two CLO deals year to date.
The private equity firm and global asset manager is based in Bethesda, Md.
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