Credit Suisse Asset Management (CSAM) has increased its latest CLO, CSAM CLO IV, from early market talk of $425 million to $600 million, despite having the opportunity to vastly increase the size of the deal. Credit Suisse First Boston marketed and structured the CLO that will increase par loan assets under management to approximately $4.5 billion. Andrew Marshak, a managing director at CSAM, referred calls to CSFB bankers, who declined comment.
A CDO banker familiar with the deal said there is enough investor demand right now to take some deals into the $2 billion range, but then the manager would need to find the appropriate collateral and pricing on the liabilities would widen. He said in the leveraged loan space nobody has really stretched themselves too far, but this is not the case in other asset classes, such as asset-backed securities. "Investor demand is ridiculous," he said, adding that the quality of the collateral required to fill some of the deals is falling below the accepted levels.
The CSAM vehicle was upsized on a pro rata basis across the tranches, said the banker. He noted that the $449 million triple-A tranche priced at LIBOR plus 38 basis points, which is at the tight end of recent deals. He declined to provide the all-in cost of funding. The equity piece constituted approximately $50 million.