GLM III and its affiliated investment manager GoldenTree Asset Management closed a $500 million collateralized loan obligation (CLO) to be managed by GLM III. With the closing of this CLO, GoldenTree Loan Management US CLO 26 (GLM US CLO 26), GoldenTree has issued 34 CLOs totaling nearly $18 billion under its GLM CLO strategy. Since its inception in January 2017, the GLM strategy was intended to be compliant with applicable Risk Retention regulations. While a US Court of Appeals ruling on Feb. 9, 2018 led to the repeal of US risk retention rules for open market CLOs, GLM CLOs have intended to comply with European Union and/or United Kingdom Risk Retention regulations.
GLM US CLO 26 will initially be backed by a 95% ramped $476 million portfolio of primarily senior secured loans as of closing and will have a five-year reinvestment period and a two-year non call period. The CLO was arranged by a bank syndicate with BofA Securities as structuring lead, and Morgan Stanley and Wells Fargo Securities as co-leads. The syndicate distributed the rated notes issued by the CLO, while GLM III invested in the CLO’s equity.
GLM US CLO 26 issued $308 million of senior AAA rated notes with a coupon of S+1.28%, along with junior AAA rated notes and other lower rated senior, mezzanine and junior notes, for an overall weighted average coupon of S+1.71%.
