INVESCO Sets New Benchmark In Avalon Redux Deal

Lehman Brothers has wrapped up a refinancing of a collateralized loan obligation for INVESCO Senior Secured Management that scored the tightest pricing seen on the top-rated tranche of a leveraged loan CDO.

  • 25 Feb 2005
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Lehman Brothers has wrapped up a refinancing of a collateralized loan obligation for INVESCO Senior Secured Management that scored the tightest pricing seen on the top-rated tranche of a leveraged loan CDO. "We are very happy with the transaction and how it ultimately ended up," said Anthony Clemente, head of the bank loan/CDO group at INVESCO. "We were extremely delighted at the level of execution the market provided us."

The triple-A notes were printed at LIBOR plus 27 basis points. The $602 million Avalon Capital 3 contains a large part of its collateral from Avalon Capital 2, a 2001 vehicle. An official close to the deal said the decision to refinance came because there was "enough interest in the environment to do it and an interested investor base." The success of the first fund, he said, allowed the transaction to take place. A Lehman banker declined comment. The deal was anticipated to close last week.

Just as credit spreads have tightened on leveraged loans, there has been a corresponding compression in CLO liabilities. This is partly driven by triple-A buyers executing negative basis trades and a surge in popularity in CDO equity. Highland Capital Management achieved a tighter spread for its latest $685 million Southfork CLO with the top-rated tranche pricing at LIBOR plus 25bps, but this included a wrap from a financial insurer.

  • 25 Feb 2005

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 BNP Paribas 10,542 20 17.55
2 Bank of America Merrill Lynch (BAML) 6,103 21 10.16
3 Citi 5,130 13 8.54
4 JP Morgan 4,681 6 7.79
5 Morgan Stanley 4,137 11 6.89

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 80,818.31 235 11.57%
2 Bank of America Merrill Lynch 66,338.04 186 9.50%
3 Wells Fargo Securities 56,344.19 164 8.07%
4 JPMorgan 53,381.65 156 7.64%
5 Credit Suisse 44,872.46 115 6.43%