CIT CLO preps £223.47 million CLO offering; yields on lower-rated tranches 'coming down'

By Cristal Cody

Tupelo, Miss., Oct. 8 - The deal pipeline is set to include an infrequent sterling-denominated collateralized loan obligation transaction from CIT Asset Management LLC, according to a market source.

CIT plans to price £223.47 million of notes due Sept. 15, 2023 in the CLO offering via Deutsche Bank Securities Inc., the source said.

About $60 billion of CLOs have priced year to date, and analysts estimate total issuance of about $70 billion to $80 billion for the year.

Meanwhile, new CLO subordinated note slices "are coming out with yields in the low teens," one source said on Tuesday.

"Seeing new issuance, yields on lower debt tranches are coming down," the source said. "Rates are rising, triple As have increased in spread, and that money's got to come from somewhere, so subordinated notes will take it on the chin."

CIT set to price CLO

The deal from CIT CLO 2013-1 Ltd. will include £93.31 million of class A notes (/AAA/); £19.24 million of class B notes (/AA/); £22.01 million of class C deferrable notes (/A/) and £88.91 million of subordinated notes, according to an informed source.

The CLO does not have a non-call period, and the issuer is not allowed to reinvest in any new assets.

The notes are backed by a static pool of mostly broadly syndicated senior secured corporate loans.

CIT Asset Management is a subsidiary of CIT Group Inc., a Livingston, N.J.- and New York City-based lender to small and middle market businesses.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.