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American Capital Closes $414 Million Managed CLO

April 02, 2013, 07:11 AM
Filed Under: Industry News

American Capital announced that an affiliate, ACAS CLO 2013-1, Ltd. (the "CLO"), has closed on the sale of $414 million of collateralized loan obligation bonds.  The transaction was arranged by Deutsche Bank Securities Inc. The CLO is externally managed by American Capital Leveraged Finance Management, LLC, a subsidiary of American Capital Asset Management, LLC, a wholly-owned portfolio company of American Capital, for an annual management fee of 50 basis points of total assets.

The CLO has primarily invested the proceeds of the bonds in broadly syndicated senior secured loans purchased in the primary and secondary markets.

"We are pleased that we materially improved pricing on the financing of our latest CLO versus the CLO that we raised last September," said Mark Pelletier , American Capital managing director, CDO and CLO Group.  "We now manage three CLOs and have investments in the equity of 25 CLOs."

"With this new CLO, American Capital Asset Management continues to expand its funds under management and now manages six private funds and two public REITs," said Malon Wilkus , American Capital chairman and CEO.

The bonds sold by the CLO included AAA(sf) through B(sf) rated tranches, and a non-rated equity tranche of subordinated notes.  American Capital Leveraged Finance Management purchased $25.3 million of the non-rated equity tranche of subordinated notes, with third party investors purchasing the remaining $11 million.  The retention of an equity investment by American Capital Leveraged Finance Management is intended to make ACAS CLO 2013-1 compliant with risk retention rules applicable to credit institutions regulated in the European Economic Area.

American Capital is a publicly traded private equity firm and global asset manager.  American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate and structured products.

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