AXA Investment Managers has closed the Allegro CLO I, a US$370million Collateralised Loan Obligation (CLO).
This marks the first issuance of a pure US CLO and first US CLO 2.0 (post 2009 financial crisis) managed by AXA IM.
Allegro CLO portfolio consists of corporate assets only and must have a minimum of 90% first-lien senior secured leveraged loans. Up to 10% of the portfolio may consist of, among others, second-lien loans and unsecured loans. The Allegro CLO notes have been purchased by institutional US investors only.
Jean-Philippe Levilain, head of US Structured Finance at AXA IM, said: "We are very pleased to have successfully closed our first US CLO. Investor interest was high at all levels of the capital structure, which is encouraging for the future of the US platform we’re building."
AXA Investment Managers intends to increase activity in the structured finance team globally, considering future CLOs that would comply with the retention rules of the CRD IV regulations, offering the opportunity for certain types of institutional investors to gain exposure to this asset class.
Jean-Philippe Levilain added: "AXA Investment Managers has for many years been a leading player in the CLO space in Europe and historically an investor in the US CLO market, so it was the natural next step to extend our expertise into the more mature and diversified US market. The securitised market has proved resilient and we are seeing increased demand post global financial crisis, with issuance of CLOs reaching record highs in 2013. We see the high yield loan and CLO markets becoming increasingly global, therefore our intention is to be active in both the European and US markets. We have several more deals in the pipeline for this year alone."
The team managing Allegro CLO, based in the US, is part of the Corporate Credit team within AXA Investment Managers Structured Finance, an expertise of AXA Investment Managers. The Corporate Credit team of AXA Investment Managers consisting of 32 professionals currently manage 9.0 billion of funds, CLOs and dedicated mandates. CLOs represent 1.5 billion.