Flagship Capital Management, a loan subsidiary of Bank of America, is in the market with its third collateralized loan obligation. The vehicle is called Flagship CLO III and is initially slated at $300 million. But one source noted that in this market most deals have been increased and this is a distinct possibility. He added that the deal could price either at the end of this month or in August. B of A is underwriting the notes backing the transaction. Officials at Flagship declined comment.
Flagship and Columbia Management Advisors were both subsidiaries of FleetBoston Financial. Columbia's bank loan business was sold to Highland Capital Management, when the merger with B of A went through. The sale was motivated by Columbia's mutual funds business, which was restricted from buying loans originated by Fleet and B of A under the Investment Company Act of 1940 (LMW, 4/16). However, Flagship only manages loans through CLOs, so it does not have the same restrictions.