Citigroup is structuring a $350 million market-value collateralized loan obligation for Hartford Investment Management Company called Stedman Loan Fund CLO 2005-I. Stedman is similar to Hartford's previous deals, which include the $400 million Bushnell Loan Fund CDO 2004, and the $350 million Trumbull Rated Loan Fund 2003-I. The deals are named after historical Connecticut figures.
The deal calls for Citigroup to issue approximately $55 million of notes and the fund will then be levered through total rate of return swaps. Market-value structures enable a manager to trade without restriction, whereas a cash flow deal has more limits on trading activity. This is Hartford's second CLO, but will be the fifth managed by Michael Bacevich and John Connor, following their move from Cigna Investment Management last year (3/26). The firm is also in the process of raising its first retail loan fund. Bacevich confirmed Stedman.