Katonah Capital Management became the first manager to issue notes on a collateralized loan obligation this year by raising debt for the approximately $350 million Katonah CLO IV. One analyst said the $265 million of Triple-A notes priced at LIBOR plus 55 basis points, which is tighter than the recent CLO arbitrage pricing of LIBOR plus 60. But, Katonah reportedly priced the Triple-As with a discount margin in the realm of LIBOR plus 60-65. The BBBs traded at LIBOR plus 290 and priced at par. Officials at Katonah and lead underwriter Credit Suisse First Boston, could not be reached by press time. Katonah IV has a weighted average rating of B1/B2 and references a pool of 85% loans and 15% bonds.
The CDO pipeline is healthy and expanding, according to analysts. Other deals close to pricing include Nomura Corporate Research and Asset Management's $300 million deal called Clydesdale CLO 2003. Oak Hill Advisors is ramping up a new $400 million collateralized loan obligation called Oak Hill Credit Partners II. This vehicle is said to be close to pricing with Deutsche Bank as the underwriter (LMW, 1/20). Other deals on the horizon are for Stone Tower Capital (1/13) and CLOs from last year such as HarborView Asset Management's HarborView CLO V.