AXA closes American CLO with $406m

The firm believes investors will seek more exposure to the strategy in the near future due to present market conditions.

AXA IM Alts has closed its 12th American CLO at $406 million with capital from an investor base across the US, Europe and Japan.

The vehicle, Allegro CLO XII, closed in January and more than half the capital came from existing AXA CLO investors. It has a non-call period of one year and a three-year reinvestment period.

The CLO was priced in December 2020 with the AAA tranche pricing below the average at 125.8 basis points. The close bring AXA IM Alts’ assets under management to more than €11 billion across its loan platform globally.

Yannick Le Serviget, global head of leveraged loans and private debt at AXA IM Alts, said: “In the coming months we believe there will be a further increase in investor demand for US CLOs, particularly amongst AAA, driven by the demand coming from banks and an attractive value to US investment-grade corporate credit.

“We are likely to see additional appetite for US CLOs from pension funds and insurers as they seek to further increase their allocation, as well as new investors entering the asset class, with a preference for managers who have experience of navigating different market cycles and volatility, which is likely to continue this year.”

Allegro CLO XII will be managed by the AXA IM Alts structured finance team which manages approximately €50 billion of assets across the non-traditional credit spectrum.