Wells Fargo Said to Raise $274.6 Million CLO for 40/86 Advisors

Wells Fargo & Co. (WFC) raised a $274.6 million collateralized loan obligation for 40/86 Advisors Inc., according to two people with knowledge of the deal.

The CLO includes a $178 million piece rated AAA by Standard & Poor’s that pays a rate of 170 basis points more than the London interbank offered rate, said the people, who declined to be identified because the terms are private.

CLOs are a type of collateralized debt obligation that pool high-yield, high-risk loans and slice them into securities of varying risk and return.

The CLO for Carmel, Indiana-based 40/86, a unit of CNO Financial Group Inc. (CNO), also has a $15 million AA slice that pays interest at 350 basis points more than the benchmark, the people said. The fund also includes a $26 million A piece that pays a rate of 500 basis points more than Libor; a $12.3 million BBB slice that pays a rate of 700 basis points and a $10.5 million BB piece that pays a rate of 900 basis points, the people said.

There is also $32.8 million of subordinated notes, the people said.

Elliot Sloane, a spokesman for 40/86, didn’t immediately return a telephone call seeking comment.

To contact the reporter on this story: Kristen Haunss in New York at khaunss@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net

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