Allied Irish Bank priced notes two weeks ago to fund its latest $400 million collateralized loan obligation and is looking to become an active participant in the growing European and U.S. CLO market. The deal marks the third cash-flow arbitrage CDO completed by the bank, which has structured past deals with both leveraged loans and high-yield bonds as collateral. "We'll be back and back again in the CLO market," said Paul Carey, head of Corporate Banking New York for AIB, explaining that loan and bond CDOs are becoming a greater part of the firm's overall approach to the loan market. Carey said the bank is looking to do more CLOs in the future, including a U.S. denominated deal in the next year and additional Euro-denominated deals like the one the bank just closed.
The latest deal, called Clare Island CLO I, comprises Euro-denominated assets and was sold primarily to European investors, he said, noting an increasing number of good assets abroad in the European loan market. Carey said the European leveraged loan market has experienced healthy growth since the early 1990s and continues to expand.