LaSalle Financial Services is marketing its first collateralized loan obligation, the $400 million De Meer Middle Market CLO. The deal takes advantage of the bank's middle-market loan origination and its trustee group, which is experienced in the collateralized debt obligation market, said Nathan Flanders, senior director at Fitch Ratings.
The static cash transaction is entirely backed by first-lien loans, with a 69% concentration in middle-market, 14.7% in larger middle-market and 16.3% in broadly syndicated loans. The loans are originated by LaSalle Bank and LaSalle Bank Midwest. The trustee is LaSalle Bank.
The deal is unusual among middle-market CLOs for not having a reserve account, a common feature of these deals, said Jim McCary, associate director at Fitch. Reserve accounts typically trap a payment period of interest on the liabilities in case of delayed repayments on the loans.
De Meer Asset Management, a division of LaSalle Financial Services, is the collateral manager; Wachovia Capital Markets is the underwriter. The deal is expected to close in August. Craig Benton, v.p. and CDO banker at Wachovia, declined comment and Peter Melloni, the portfolio manager, did not return a call.