CSFB Prices Notes For Barclays CLO

Credit Suisse First Boston has priced the notes for Barclays Capital Asset Management's Venture CDO II, allowing at least one manager to leave the pipeline and start ramping up assets. The cash-flow arbitrage vehicle is a $250 million collateralized loan obligation, said a banker. The liabilities priced within the current range, which is somewhere south of LIBOR plus 58 basis points on triple-A's, he said. Though the triple-B tranche is small at $12.25 million, he said the overall structure is reasonably standard. "One of the goals is to maximize the size of the triple-A tranche, as this is the least expensive debt," he noted. The equity piece for the deal is $23.75 million.

Venture CDO II illustrates the extent of increasing costs on raising debt for a CDO this year. Barclays reportedly completed a similar CLO in the Spring called Venture CLO 2002. The Triple-A tranche priced at LIBOR plus 46 basis points, while the Triple-B priced at LIBOR plus 270 basis points (LMW, 3/3). However, though the cost of funding has risen, widening spreads on the underlying collateral is leading to a healthy funding gap, a banker said. It could not be confirmed how much of the assets have been warehoused prior to pricing or the timeframe for completing ramp-up. Hans Christensen, the portfolio manager responsible for leveraged loans at Barclays referred questions to a spokeswoman, who did not return calls. Bankers at CSFB also did not return calls.