Babson drawn back to European CLOs but arbitrage threat persists

By Tom Porter
14 Jul 2014

Babson Capital has joined an extensive pipeline of prospective European CLO 2.0 issuers, looking to print its second post-crisis euro transaction. Bankers are looking forward to robust supply for the second half of the year, but concerns remain over the effect of a strong loan market on overall returns.

Babson Capital Europe issued its first European CLO 2.0, the €412.5m Euro CLO 2014-1, in March through arranger Bank of America Merrill Lynch. It is working with JP Morgan this time around.

The debut deal achieved strong demand from investors across the capital stack, though at 140bp over ...

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