Morgan Stanley Said to Raise $624.5 Million CLO Fund for Sankaty

Morgan Stanley (MS) raised a $624.5 million collateralized loan obligation for Sankaty Advisors LLC, the largest U.S. CLO for the firm, according to two people with knowledge of the deal.

The fund includes a $381 million slice rated AAA that pays 142 basis points more than the London interbank offered rate, said the people, who declined to be identified because the terms are private. Libor is a rate at which banks say they can borrow in dollars from each other.

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.

Bank of America Corp. raised a $414 million CLO for the firm in April, according to data compiled by Bloomberg.

Mary Claire Delaney, a Morgan Stanley spokeswoman, declined to comment.

To contact the reporters on this story: Kristen Haunss in New York at khaunss@bloomberg.net; Patricia Kuo in London at pkuo2@bloomberg.net

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

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