Moelis Asset Management LP’s Steele Creek Investment Management LLC raised its first collateralized loan obligation, a $413.5 million deal, according to a person with knowledge of the plan.
Steele Creek, which is a unit of a firm controlled by Kenneth Moelis and was formed last year, arranged the fund with BNP Paribas SA, said the person, who asked not to be identified because terms of the deal are private.
The deal includes a $213.8 million slice with a senior rating that pays a coupon of 160 basis points more than the London interbank offered rate, said the person. Libor, the rate at which banks say they can borrow from each other, was set at 23.2 basis points today.
Andrea Hurst, a spokeswoman for Steele Creek, declined to comment on the sale.
CLOs pool high-yield corporate loans and slice them into securities of varying risk and return, typically from AAA ratings down to B. The lowest-ranking portion, known as the equity portion, offers the highest potential returns and the greatest risk because investors are the first to see their interest payouts reduced when loans backing the CLO default.