Bank of America Merrill Lynch has teamed up with Symphony Asset Management, a unit of Nuveen Investments, for new $500m collateralized loan obligation (CLO), reported The Wall Street Journal.
Reportedly, the new CLO will be known as Symphony CLO CII and it will consist newly issued loans, rather than refinancings of old loans.
The new CLO will also consist of leveraged loans that have been packaged together and divided into slices of different risk and returns.
As per the term sheet reviewed by Dow Jones Newswires, collateral will be $486m of first-lien debt loans and $14m of second-lien debt. The CLO will have a reinvestment period of one year and a final maturity of eight years.
The CLO will comprise of $317m Class A tranche, a $113m Class B tranche and a $70m tranche of subordinated notes. The Class A tranche is likely to have only one investor, instead of several investors particpating in the CLO’s as in the past.