Babson Capital Management closed five CLOs with over $1.7 billion under management. Included in the transaction are Victoria Falls CLO, Diamond Lake CLO, Clear Lake CLO, Summit Lake CLO, and St. James River CLO.
In this deal, Babson Capital assumed the role of replacement collateral manager of the CLOs, whose underlying collateral consists mostly of bank loans from Jefferies Capital Management, which is a unit of Jefferies Group.
The deal was completed on Jan. 29. It raised Babson Capital’s total of high yield assets under management, which includes bank loans and high yield bonds in various accounts and funds, to $19.3 billion.
As part of the deal, three employees from Jefferies Capital Management have joined Babson. They are directly involved with the five funds and are the following: Mark Senkpiel as portfolio manager for the funds and a managing director, Kimberly Atkinson as a director, and Alyssa Tabora as an associate director.
“We are honored to have Jefferies Capital and other investors across the CLOs choose to place their confidence in Babson Capital," said Russell Morrison, a managing director and head of high yield investments at Babson Capital. “We believe this transaction is a win for all parties involved.”
Jefferies Group, Babson Capital and Massachusetts Mutual Life Insurance Co. (MassMutual) have an active strategic relationship, including their joint ownership of Jefferies Finance, which is an originator of middle market credit solutions.
Including the Jefferies CLOs, Babson Capital has been named replacement collateral manager for 21 CLOs totalling close to $6.5 billion under management.
The firm created its first structured fund in 1991 and currently manages 60 CDOs totaling $22.1 billion in structured credit assets as of Jan. 31.