The new Eur 300 million collateralized loan obligation of Pramerica is a new breed of CLO structures post 2008 in Europe. This new structure would allow the asset manager to purchase bonds instead of having to search for leveraged loan collateral that comes few and far between.
This new structure also provides for new strategies to increase the number of CLO deals to significant amounts together with other financial instruments.
Just last March, nearly US$30 billion of high yield bonds were put at a premium of US $7 billion in leveraged loans. This number was reached after data obtained from Thomson Reuters.
Dryden XXVII Euro CLO 2013 of Pramerica, which is operated through Barclays, has a target fund of Eur 291 million with 75% of it comprising senior secured bonds and loans. There is no specification though as to the split between loans and bonds.
The Pramerica rate allows for securities at a fixed rate of 40% as allowed during presales.
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