GLM III and its affiliated investment manager GoldenTree Asset Management closed a $703 million collateralized loan obligation (CLO) to be managed by GLM III. With the closing of this CLO, GoldenTree Loan Management US CLO 28, GoldenTree has issued 37 CLOs totaling nearly $21 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 on Feb. 9, 2018 held that the U.S. risk retention rules do not apply to collateral managers of open market CLOs, GLM CLOs have intended to comply with European Union and/ or United Kingdom Risk Retention regulations.
GLM US CLO 28 will initially be backed by a 99% ramped $694 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, and BofA Securities and Wells Fargo Securities as co-leads. The syndicate globally distributed the investment grade and BB rated notes issued by the CLO, while GLM III invested in the CLO’s equity as well as B rated notes.
GLM US CLO 28 issued $448 million of senior AAA rated notes with a coupon of S+1.17%, along with junior AAA rated notes and other lower rated senior, mezzanine and junior notes, for an overall weighted average coupon of S+1.57%.
