Middle market commercial finance company Churchill Financial Holdings last week announced plans to acquire CDO manager Centre Pacific LLC - a move that will create another player in the rapidly growing middle market loan CLO space.
The number of middle market CLO managers has tripled in the past five years, according to Moody's Investors Service. At the same time, U.S. issuance in the space has grown from less than $1.5 billion in 2001 to 24 transactions totaling more than $14.5 billion year-to-date. Twelve of those transactions came in the third quarter, according to the rating agency. "This year there was substantial growth, and I think there is more of that to come," said David Burger, an analyst at Moody's. Positive performance and relatively generous risk premiums in the middle market sector have drawn a number of the new managers.