Standard Chartered closes a $2 billion synthetic CLO

Standard Chartered Bank yesterday announced the closing of Start CLO VII, a synthetic balance sheet CLO. As the name suggests it is the bank’s seventh loan securitisation and comes a year after the last Start CLO was issued.

Start CLO VII was originally going to be a $1.5 billion deal but strong demand saw the transaction up-sized to $2 billion, according to a statement from the bank. The reference portfolio consists of loans to 700 borrowers mainly in Asia and the middle east with an average rating of Ba1/BB+.

Moody’s was brought in to rate three tranches retained by Standard Chartered Bank (Hong Kong). The most senior of these tranches has an attachment point of 18% and a detachment point of 21% which the rating agency has rated Aaa (see table). A rating was required for the tranches which the bank retained while the $140 million equity position was sold to investors.  

Start CLO VII has a three and-a-half year replenishment period to replace loans that have been paid down or reduced. It reaches its final maturity date in June 2018.

Start CLO VII