Bear Stearns has priced Octagon Credit Investors’ latest $400 million collateralized loan obligation, Octagon CLO VII. Pricing on the triple-A tranche was LIBOR plus 36 basis points and a portfolio manager said there is aggressive pricing throughout the structure.
James Ferguson, who founded Octagon in 1994, and portfolio manager Michael Nechamkin will manage the vehicle. Ferguson and portfolio manager Andy Gordon manage funds V and VI. Octagon officials declined comment.
The pricing is at the tight end of recent deals and is significantly tighter than pricing available at the start of the year. This spread tightening on the liabilities should enable equity holders to get higher returns.