American Express Asset Management last week priced one of the largest cash-flow collateralized loan obligations in several years after market hunger drove the size of the deal far beyond its original bogey. The $1.1 billion Centurion VII deal was said to be initially slated at a much lower size, but the manager rode a wave of demand. "AMEX initially modeled a smaller size, but given investor demand we upsized and even at this larger level we were oversubscribed," said an AMEX spokesman. He said the structure was a typical CLO structure with UBS as the underwriter.
Sources said AMEX was initially planning a $400 million CLO and increased it earlier this year. The spokesman was unable to confirm these details. Price talk on the top-rated tranches of the notes was LIBOR plus 40 basis points. Jeff Herlyn, a co-head of the global credit CDO group at UBS, declined comment.
Earlier this year, The Blackstone Group raised a $1 billion CLO called Monument Park CDO with UBS as the lead. This transaction was structured like a delayed-draw loan with an 18-month drawdown. It could not be determined what the ramp-up period is for the Centurion transaction or how much of the assets have been bought already. Amex's CDO group prior to this transaction had assets of approximately $7.5 billion at par value in both traditional cash flow and synthetic structures in high-yield loans and bonds, according to Standard & Poor's. Lynne Hopton and Yvonne Stevens lead the CDO team.