Loan notes turn chunky in new issue CLOs

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By Owen Sanderson
06 Apr 2021

Three recent CLO issues have underlined the size of the US bank buyer base in triple-A rated tranches, structuring loan note tranches of more than €150m — a format favoured in particular by Bank of America and State Street for their investments, but which could further constrain liquidity at the top of the capital stack.

Angelo Gordon’s Northwoods Capital 23 and AlbaCore’s Euro CLO II, both arranged by Barclays, featured big loan notes, accounting for the majority of the most senior class on offer.

Northwoods Capital 23, priced on March 26, included €164m and €50m triple-A loan tranches, alongside a €32m bond tranche. ...

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