Busy 1Q as Ares, Golub each issue a 3rd CLO of 2019
Ares Management LP and Golub Capital are each printing a third collateralized loan obligation issuance of the year, according to presale reports published Monday.
Ares is sponsoring the $589.3 million Ares LIII (53) transaction, according to S&P Global Ratings. The deal will include a $351 million, triple-A Class A-1 tranche priced at 133 basis points over Libor – similar to the spread of its prior $507.5 million Ares LII deal that was issued in February.
Both deals priced wider than Ares’ first deal of the year – the $501 million Ares L1 – which closed in January and had a rate of 130 basis points over three-month Libor.
Ares LIII brings the manager’s total CLO assets to approximately $19.3 billion.
Golub is planning to issue the $407.5 million Golub Capital Partners CLO 41 (B), to be managed by its affiliate Opal BSL LLC.
The deal is priced at 137 basis points over Libor for the Class A notes, according to Fitch Ratings. The deal is structured similarly to the $410 million Golub Capital Partners 2018-39A that priced Feb. 8 (140 basis point AAA spread), by including only a two-year reinvestment period for the manager to trade for new loan assets in the deal.
Golub 41(B), set to close on April 11, will have only a one-year noncall and a 6.5-year maximum weighted average life, according to Fitch.
It has a slightly higher allowance for covenant-lite loan assets, up to 70% of the collateral pool, than Golub’s previous transaction, Golub Capital Partners CLO 40 (B), which closed Feb. 21 with 60% cov-lite cap, plus a a five-year reinvestment period and a two-year noncall.
Golub Capital has $30 billion of capital under management across its middle-market, late-stage and large-corporate syndicated lending platforms.
Month-to-date, U.S. issuers have priced $8.6 billion in CLOs, including $5.6 billion in new-issue loans, according to JPMorgan. New-deal volume to date is $23.8 billion.