--Leela Parker
Prudential Fixed Income Management recently closed the $500 million Dryden XXI Leveraged Loan CDO, bringing new issuance of collateralized loan obligations to nearly $5 billion for the summer. Prudential is the collateral manager and Goldman Sachs is the underwriter.
The deal is backed by senior secured leveraged loans, the majority of which were purchased in the secondary market. “The secondary market offers attractive financing,” said Jamie Dixon, product manager for Prudential Fixed Income. Seasoned loans available at steep discounts and the lack of any sustained primary issuance are the most compelling reasons to shop in the secondary market, Dixon said.
Moody’s Investors Service assigned Aaa, Aa2, A2 and Baa2 ratings to the four classes of floating rate notes. The notes were priced at 155, 350, 450 and 550 basis poits over LIBOR, respectively.
Of the $5 billion in CLO paper issued since June, 60% of that volume was underwritten by Goldman Sachs, according to a Citigroup Global Structured Credit Strategy report. The investment bank primarily worked with two managers, Silver Point Capital and Symphony Asset Management, in addition to completing one deal each with Ares Management and Prudential Fixed Income. Since the beginning of the year, a total of $20 billion in CLOs have been issued in the U.S. market.
A Goldman spokesman could not comment immediately.