GLM II and its affiliated investment manager, GoldenTree Asset Management, closed a $398 million collateralized loan obligation (CLO) to be managed by GLM II. With the closing of this CLO, GoldenTree Loan Management U.S. CLO 18 (GLM U.S. CLO 18), GoldenTree has issued 24 CLOs totaling approximately $13.5 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 U.S. Court of Appeals ruling on Feb. 9, 2018 led to the repeal of U.S. risk retention rules for open market CLOs, GLM CLOs are intended to continue to comply with European Union and United Kingdom Risk Retention regulations.
GLM US CLO 18 will initially be backed by a 96% ramped $384 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 including Morgan Stanley as structuring lead, BofA Securities and Wells Fargo Securities as co-leads and NatWest Markets as co-placement agent. The syndicate globally distributed the investment grade rated notes issued by the CLO, while GLM II invested in the CLO’s equity as well as B rated notes.
GLM US CLO 18 issued $256 million of AAA rated senior notes with a coupon of S+1.65%, along with lower rated senior, mezzanine and junior notes, for an overall weighted average coupon of S+2.31%.
