Highland Capital Management's Gleneagles CLO is going to be increased by as much as $350 million from its current ballpark of $550 million. Banc of America Securities is in the market with the collateralized loan obligation and will work out the final size with Highland within the next two weeks. The deal will likely settle somewhere between $750-800 million, but it could go as high as $900 million, according to a source familiar with the CLO.
Gleneagles comprises two AAA tranches as well as AA, A, and triple-B pieces. Allocations and pricing will be finalized once the size of the deal is settled. The deal is made up entirely of loans, but it has a bond bucket allowing for a 7.5% allocation. Highland currently has between $520-540 million warehoused.
The Gleaneagles CLO is wrapping up just as the post-Labor Day market kicks in. While the market is heating up, the source close to the deal said Highland's ability to increase the size of the CLO had more to do with its reputation than a voracious appetite for CLOs. Officials at Highland and B of A declined to comment.