Rabobank International has started the equity marketing for its first collateralized loan obligation, with E.A. Kratzman, formerly one of three co-founders and head of portfolio management for Institutional Debt Management, at the helm. Chiron CDO I, will be an approximately $300 million CLO with Credit Suisse First Boston acting as underwriter. The notes are expected to price by the end of the second quarter, said Kratzman, head of CLO management for Rabobank. "CSFB was picked for its historic close relationship with Rabobank and its presence in the leveraged loan market," he added.
Kratzman joined Rabobank last June, reporting to Shelly Sussman, global head of structuring/vehicle management. At IDM, Kratzman was responsible for the execution and portfolio investment strategies, managing the ELC funds as well as Apex and Tryon--seven funds totaling approximately $3.5 billion in assets. Other senior members of the Rabobank group include Randy Watkins, previously of Société Générale and now head of CLO research and Wink Mora, head of trading. Mora moved over from Rabobank's loan syndication side. The aim is to complete two CLOs a year, Kratzman said. One market source said that Kratzman's IDM deals are performing well and the manager has a strong reputation. Interestingly, D.L. Babson & Company, which bought IDM, is also in the market with a $400 million CLO (LMW, 2/16) and Mark Mahoney, IDM's ex-president, recently raised the debt for a CLO with his newly formed shop Gulf Stream Asset Management (12/15).
"The CLO business is a natural extension of our already considerable CDO management platform," said Sussman, commenting on the decision to begin managing loan assets. "Rabobank has always been a significant and successful participant in the U.S. leveraged loan market for nearly 30 years, particularly in the food and agricultural sector,'' he said. "With E.A and the team, we envision a substantial expansion of our capabilities in CDO management." Currently Rabobank manages $15.5 billion in structured credit assets in a variety of portfolios and vehicles, which includes $3.3 billion of mezzanine and equity securities and $9.7 billion of CDO investments of which $2.4 billion are in CLO investments.