Citigroup Inc. raised a $355.4 million collateralized loan obligation for Aegon USA Investment Management LLC, according to two people with knowledge of the deal.
The CLO, Cedar Funding Ltd., includes a $227.5 million slice rated AAA that pays a rate of 135 basis points more than the London interbank offered rate, said the people, who declined to be identified because the terms are private. The fund was increased in size from a target of $300 million, the people said.
There have been $9.9 billion of CLOs backed by widely syndicated loans raised this year, according to data compiled by Bloomberg. For the same time period last year, $1.6 billion of such funds were raised, according to the data.
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 Aegon fund is a partial refinancing of a Malibu Funding transaction, a market value CLO issued in 2005, one of the people said. Aegon is the fixed-income management platform for Aegon Asset Management
Scott Helfman, a Citigroup spokesman, declined to comment. John Bailey, director of leveraged loans at Aegon USA Investment Management, didn’t immediately return a telephone call seeking comment.
Details of the financing are as follows:
Class Amount S&P Ratings Coupon Discount Margin A-1 $227.5 M AAA L+130 L+135 A-2 $39.65 M AA L+250 L+260 B $24.5 M A L+300 L+440 C $15.75 M BBB L+400 Retained D $13.3 M BB L+600 Retained Sub Notes $34.7 M NR Retained