Citigroup closed a $350 million balance sheet collateralized loan obligation after notes priced for the deal last week. Bankers said Salomon Smith Barney sold the notes to investors last week to fund the balance sheet vehicle, named Project Securitization Company Ltd. 1. The special purpose vehicle will securitize project finance loans made to the telecom, petrochemical, and power sectors. The portfolio comprises 25 different loans without any one sector dominating the portfolio by more than 10%. A banker noted that only a handful of project finance based CLOs have been structured prior to this deal.
Officials at Citigroup did not return calls by press time.
The deal was split between two debt tranches, a $280 million, Standard & Poor's rated AAA tranche priced at LIBOR plus 1/2% and a AA, $63 million tranche priced at LIBOR plus 3/4%. The equity tranche of the deal is $7 million and will be retained by Citgroup. The bank is also trustee on the deal.