Ares Management LLC is planning to raise a $402 million collateralized loan obligation with Bank of America Corp., according to two people familiar with the talks.
The investment portfolio will include a $260 million slice rated AAA by Standard & Poor’s, a $21 million slice graded AA, a $35 million slice graded A, a $22 million BBB rated piece and an $18 million piece with BB rating, said one of the people, who declined to be identified because the talks are private.
The portfolio will also include a $46 million slice of equity. Bank of America may market and price the deal in January, the person said.
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.
Kerrie McHugh, a Bank of America spokeswoman, and Bill Mendel, a spokesman for Los Angeles-based Ares, declined to comment.