Bank of America Corp. is raising a $832 million collateralized loan obligation for Symphony Asset Management LLC, according to a person with knowledge of the transaction.
The Symphony CLO XII may include a $485 million slice rated AAA, said the person, who asked not to be identified because the terms aren’t final. Ares Management LLC raised the largest fund of the year in March, the $940 million Ares XXVI fund, according to Royal Bank of Scotland Group Plc.
There had been $62 billion of CLOs raised globally this year as of Sept. 6, according to JPMorgan Chase & Co. (JPM) There were $52.6 billion of CLOs backed by widely syndicated loans raised in the U.S. in 2012, according to data compiled by Bloomberg. Global CLO issuance slowed in the last two weeks of August with two U.S. deals completed, compared with 14 during the first two weeks of that month, according to JPMorgan.
Symphony, the San Francisco-based unit of Nuveen Investments Inc., which oversaw about $13.2 billion in assets on June 30, also raised an $827.5 million CLO with Bank of America in January, according to Bloomberg and RBS data. Nuveen is owned by Chicago-based private-equity firm Madison Dearborn Partners LLC.
Kathleen Cardoza, a Nuveen spokeswoman, declined to comment about the CLO.
JPMorgan revised its year-end forecast for new-issue AAA CLO spreads to between 125 basis points and 130 basis points more than the London interbank offered rate up from 100 basis points. Libor is the rate 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 returns. A basis point is 0.01 percentage point.
To contact the editor responsible for this story: Faris Khan at email@example.com