GC Investment offers $354.3 million CLO; 2015 vintages ‘fare better’ than older CLOs

By Cristal Cody

Eureka Springs, Ark., April 22 – The middle-market CLO primary space is expected to see its second deal of 2016.

GC Investment Management LLC plans to price a $354,288,000 middle-market transaction.

In February, NewStar Financial, Inc. brought the $348,006,000 small-to-middle enterprise CLO transaction, NewStar Commercial Loan Funding 2016-1 LLC.

Year-to-date U.S. CLO volume totals about $9.5 billion from 24 deals, according to Prospect News data.

In other activity, Wells Fargo Securities LLC analysts said in a note on Friday that 2014 vintage CLOs continue to underperform other U.S. post-crisis vintages.

“The deals in the 2015 vintage have fared better, as they likely avoided many commodity-related loans that have led to distress in earlier-vintage portfolios,” the analysts said. “Despite the recent rally in the loan market, 73% of deals have more than 5% exposure to loans priced less than 80.”

The 2014 vintage has the highest median oil and gas exposure, at 4.1%, according to the note. The 2015 CLO vintage has the lowest median exposure, at 2.4%.

In the secondary market, 48 investment-grade CBO/CDO/CLO issues totaling $190.21 million and 39 non-investment-grade CBO/CDO/CLO securities totaling $231.29 million were traded on Thursday, according to Trace.

During Wednesday’s session, 37 investment-grade issues totaling $170.03 million and 25 non-investment-grade notes totaling $117.69 million were traded.

GC Investment markets CLO

GC Investment Management plans to price $354,288,000 of notes due May 5, 2028 in the Golub Capital Partners CLO 31(M) Ltd./Golub Capital Partners CLO 31(M) LLC deal, a source said.

The transaction includes $192.5 million of class A floating-rate notes (AAA); $28,875,000 of class B floating-rate notes; $34.5 million of class C floating-rate notes and $98,413,000 of subordinated notes.

Wells Fargo Securities LLC is the placement agent.

The transaction is backed primarily by middle-market senior secured loans.

GC Investment Management, an affiliate of New York-based middle market lender Golub Capital, priced two CLO deals in 2015.

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