Elmwood Preps CLO Deal to Profit Off Beaten-Down Loan Prices
Sumitomo Mitsui Financial Group Inc. is arranging the CLO sale, which is structured with a reinvestment period of five years and a non-call period of two years, said the people, who asked not to be identified discussing a private matter.
Photographer: Kentaro Takahashi/BloombergElmwood Asset Management is marketing a $400 million collateralized loan obligation that seeks to take advantage of leveraged loan prices dropping to their lowest in nearly two years.
The deal is a variation on offerings known as “print-and-sprint” transactions, people with knowledge of the matter said. That’s where CLO managers quickly purchase leveraged loans in the secondary market rather than slowly buying up the debt in the primary market. Managers sometimes seek to put together such deals when leveraged loan prices weaken significantly, often during bouts of widespread market volatility.