Bank of America Corp. raised an $802 million collateralized loan obligation for Credit Suisse Asset Management, the largest deal backed by widely syndicated loans raised this year.
This is the fourth CLO the firm has issued in 2012, according to data compiled by Bloomberg. It most recently raised a $516.3 million fund with Credit Suisse Group AG in September.
There have been $41 billion of CLOs backed by the widely syndicated debt arranged this year in the U.S., according to Bloomberg data. Sales are up from $11.7 billion during last year and the most since the market peak of $91.1 billion in 2007, according to Bloomberg and Morgan Stanley data. JPMorgan Chase & Co. said there could be $60 billion to $70 billion of such funds next year.
“U.S. CLO new issuance remained robust in October and the first half of November,” Morgan Stanley analysts led by Vishwanath Tirupattur wrote in a Nov. 13 report. “October showed the highest monthly issuance amount since 2007.”
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.
Oak Hill Advisors LP previously held the record for the largest CLO this year, a $770 million fund the firm raised with Bank of America last month, according to Bloomberg data.
The CSAM CLO includes a $300 million slice rated AAA that pays a rate of 137 basis points more than the London interbank offered rate, according to people with knowledge of the fund, who asked not to be identified because the terms are private. Libor is the rate banks say they can borrow in dollars from each other.
Katherine Herring, a Credit Suisse spokeswoman, and Kerrie McHugh, a Bank of America spokeswoman, declined to comment.