Carlyle Investment Management and MJX Asset Management have added a total of $1.4 billion to the CLO pipeline, according to presale reports from Fitch Ratings.

Carlyle is marketing an $800 million transaction, Carlyle Global Market Strategies CLO 2014-3. Net proceeds will be used to purchase a portfolio of primarily senior secured leveraged loans.  The pool consists of 95.1% first lien senior secured loans.

Of the senior and subordinated notes to be issued, the $359.4 million class A-1A notes and $155 million class A-1B notes received preliminary ‘AAA’ ratings from Fitch, both benefiting from a credit enhancement of 35.7%.  The A-1A notes will be marketed at three-month Libor plus 146 basis points and the A-1B notes will be offered at three-month Libor plus 134 basis points.

The transaction has a four-year reinvestment period and two-year non-call period—both in line with recently marketed CLOs.

Citigroup Global Markets is the arranger and placement agent.

Carlyle issued its last U.S. CLO, the $617.5 million Carlyle Global Market Strategies CLO 2014-2, in June.  Standard & Poor’s rated the $377 million class A notes ‘AAA.’  The deal is backed by a revolving pool consisting primarily of broadly syndicated senior secured loans.  The notes mature in May 2025.

Carlyle Investment Management is one of the world’s largest alternative asset managers, with $199 billion in assets under management as of March 31, 2014.  As of the first quarter of 2014, the Global Market Strategies group (of Carlyle) was actively managing 11 U.S. CLOs still in their reinvestment period.  The company is headquartered in Washington, D.C.  In 2013 Carlyle raised more than $3 billion in new issue CLOs, including $2.16 billion in the U.S. with four CLOs, and €685 million from two European CLOs. 

MJX Asset Management is back with its second CLO of the year. The $600 million Venture XVIII CLO, will be backed by a portfolio of leveraged loans, 98.8% of which will be first lien senior secured loans.  The portfolio includes 257 loans from 250 high-yield obligors, and has a weighted average life of six years.

Fitch assigned preliminary ‘AAA’ ratings to both the $271 million class A notes and $100 million class A loans—together the “class A debt.”  The class A loans contain a conversion option where the loan balance converts to class A notes, and can be exercised more than once.  The conversion option provides liquidity to the class A loans since loans are less tradable, relative to notes.  Both the class A loans and class A notes benefit from a credit enhancement of 38.2% and will reach final maturity in October 2026.

MJX’s last issuance, $716.7 million Venture XVII CLO, was in May.  The deal is backed by a revolving pool consisting primarily of broadly syndicated senior secured loans.  Standard & Poor’s rated the $432 million class A notes, maturing in July 2026, ‘AAA.’

Venture XVIII will have a 4.1 year reinvestment period and a 2.1 year non-call period—both in range with recent CLOs on the market.

RBC Capital Markets is the arranger.

MJX Asset Management, a registered investment advisor and fundamental credit investment firm, was founded in 2003.  MJX currently has $7.4 billion in assets under management and has brought eight 2.0 CLO deals to market, with a total issuance of over $4.7 billion since 2012.

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