Franklin Templeton is ramping up a new collateralized loan obligation namedFranklin CLO III. The fund's latest deal is slated to be roughly $400 million, but a source close to the situation said deal size has not yet been finalized as all of the equity for the transaction has not been raised. The manager is ramping up assets for the leveraged loan structure and has warehoused roughly 50% of those assets so far. Issuance of notes for the deal is to take place in April or May following the current marketing period. Merrill Lynch will underwrite the notes. Officials at Franklin Templeton declined to comment and Merrill Lynch officials did not return calls.
The structure of the deal has been loosely set with price talk in the following area: A $276 million, triple-A tranche priced at LIBOR plus 50 basis points; a $48 million, double-A tranche priced at LIBOR plus 80 basis points; a $40.5 million triple-B tranche priced at LIBOR plus 260 basis points; an $11 million double-B tranche priced at LIBOR plus 725 basis points. The amount of equity the manager is going after for the deal is $32 million, but the effort to raise equity continues.