Cerberus Raises $833 Million CLO Backed by Mid-Market Lending
Cerberus Capital Management LP, the private-equity firm led by Stephen Feinberg, said it raised $833 million for a collateralized loan obligation that will support its lending to small and medium enterprises.
The CLO, known as A5 Funding LP, includes a $300 million top-rated term note paying 250 basis points more than three- month London interbank offered rate, the New York-based firm said in a statement.
“The market environment provides attractive opportunities for the Cerberus direct lending business,” Kevin Genda, vice chairman of Cerberus Business Finance said in the statement. “We expect to have an additional issuance in the coming months.”
The deal was structured and sold by Natixis which is also the administrative agent for the CLO. A basis point is 0.01 percentage point.
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.
Details of the financing are as follows:
Tranche Size Coupon Moody’s Rating A Revolver $95.85 million 275 bpts+Libor Aaa A Term Notes $300 million 250 bpts+Libor Aaa B Term Notes $68.75 million 500 bpts+Libor A2 C Term Notes $35.4 million 600 bpts+Libor Baa2 Equity $333.33 million Residual N/A
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