(Corrects paragraph 3 to read 'fourth' instead of 'third')
By Claire Ruckin
LONDON, April 16 Global investment manager Alcentra is expected to launch a new European Collateralised Loan Obligation (CLO) on Wednesday, banking sources said.
JP Morgan has been mandated to arrange the CLO and more details are expected on Wednesday, such as its size, structure and potential pricing, bankers said.
Alcentra's new CLO will be the fourth new European CLO since the onset of the financial crisis. Cairn Capital reopened the market in February with a 300 million euro ($392.52 million) CLO arranged via Credit Suisse, closely followed by a 300 million euro CLO from Pramerica and Barclays. Last week Apollo priced its new 334 million euro European CLO through Citigroup.
"The new CLOs are coming on fast and furious," a leveraged finance banker said.
The news is supportive for the leveraged loan market as CLOs have been one of the main investors in the space. There were fears there would be nothing to replace declining liquidity as a number of existing CLOs come to the end of reinvestment periods.
Funds, such as 3i, Investec, KKR and New Amsterdam have also all been touted to follow with new European CLOs.
The CLOs are likely to be structured to allow the vehicle to invest in bonds as well as loans and also covenant lite loans, in a bid to ramp up the CLOs more quickly, bankers said. ($1 = 0.7643 euros) (Editing by Louise Heavens)