American Capital has closed a $510 million collateralised loan obligation, its second CLO of 2015.
ACAS CLO 2015-2 is externally managed by American Capital CLO Management, a subsidiary of American Capital Asset Management (ACAM), for an annual base management fee of 0.5 percent and up to 20 percent in incentive fees, subject to performance hurdles.
The proceeds of the vehicle have been invested primarily in broadly syndicated senior secured floating rate loans purchased in the primary and secondary markets.
American Capital CLO Management will hold $29.5 million of the non-rated subordinated notes while third party investors purchased the remaining $20.5 million, making the CLO compliant with risk retention rules applicable to institutions regulated in the euro area. Wells Fargo securities arranged the transaction. The bonds include tranches rated Aaa through Ba3 by Moody’s, AAA tranches rated by Fitch and unrated subordinated notes.
The $225 million triple-A rated Class A-1 notes priced at Libor plus 1.5 percent. The rest of the capital structure was priced as follows:
– $100 million Class A-2 notes rated Aaa at Libor plus 1.5 percent
– $40.5 million Class B notes rated Aa2 at Libor plus 2.25 percent
– $42 million Class C notes rated A2 at Libor plus 3.05 percent
– $27.5 million Class D notes rated Baa3 at Libor plus 3.75 percent
– $25 million Class E notes rated Ba3 at Libor plus 5.9 percent
ACAM manages around $4.3 billion of loan and loan-related assets in eight American Capital CLOs, through the equity of roughly 65 third-party CLOs and American Capital Senior Floating, a listed investment manager, as of 30 June 2015.
The firm closed a $450 million fund focused on investing in the equity tranches of its CLOs earlier this month. The capital was used to purchase $300 million of existing CLO equity at fair value as at 30 June, leaving a further $150 million investment capacity, as reported.