Apollo Credit Management has priced the largest collateralized loan obligation since the financial crisis.
ALM XIV will issue $1.54 billion of notes, according to rating agency presale reports.
J.P. Morgan Securities is the arranger.
Despite the deal’s size, its $903 million senior tranche, which is rated AAA’ by Fitch Ratings and Moody’s Investors Service, printed at one of the lowest coupons so far this year, at 143 basis points over Libor, according to Thomson Reuters LPC. By comparison, triple-A CLO spreads averaged 147 basis points in May, and that was slightly below the prior month’s level, according to Thomson Reuters.
A $163.2 million class rated Aa2 by Fitch priced at Libor plus 210 basis points; an A2-rated $83.9 million class priced at Libor plus 295 basis points; a Baa3-rated $107.5 million tranche priced at Libor plus 345 basis points and a Ba3-rated $100.1 million class priced at Libor plus 485 million basis points. The deal also issued $157.35 million of subordinated notes that were not rated by either Fitch or Moody’s.
The deal matures in 12 years and contains a four-year reinvestment period. The CLO's debt tranches are not callable for two years as well.
Year-to-date new CLO issuance has reached $51.3 billion, a pace that is 32 percent ahead of last year, according to Thomson Reuters.
For more coverage on CLOs and how they affect deal structures, see "Lenders Loosen Up."