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DFG launches 3rd CLO of 2018 in $510M transaction

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DFG Investment Advisers Inc., an alternative asset management firm brimming with former Goldman Sachs and legacy HBV Group officials, is embarking on its third collateralized loan obligation portfolio of the year.

Vibrant CLO X is a broadly syndicated portfolio. Like the predecessor Vibrant IX and VIII deals this year – and each of the two CLO transactions it sponsored in 2017 – DFG is printing in excess of $500 million in notes secured by primarily first-lien loans acquired through the primary and secondary leveraged loan markets.

The $510 million transaction will have a two-year noncall and a five-year reinvestment period, and is expected to close in September, according to a presale report from Moody’s Investors Service.

The transaction will include a $320 million triple-A rated tranche. The coupon spread, based on three-month Libor, will be determined at closing. (Most BSL CLO deals in August have closed with Class A notes priced wide of 110 basis points, according to ratings agency presale reports.)

DFG’s portfolio manager is Roberta Goss, the managing director on the credit investments team heading leveraged loans, high-yield bonds and credit-based securities. The 32-year veteran is a former managing director and co-head of the HY and bank loan business of Goldman’s asset management division.

Also on the loan management platform is head trader and managing director Timothy Milton, who spent eight years on Goldman’s loan trading desk. Milton is also a USB and JPMorgan alum with a background in structuring and marketing pre-crisis CLOs.

Since retiring in 2013 after 27 years at Goldman, Philip Darivoff has served on DFT’s board as chairman. He was previously a Goldman partner and head of corporate bonds and capital markets.

Darivoff is also chair of DFG’s parent company, Vibrant Capital Partners, which in turn is owned by DFG officers and employees, according to Fitch Ratings.

DFG was founded in late 2006 by managing partners Volkan Moritz, Hilf and Kimito Iwamoto. Moritz, chief investment officer, was formerly the head of the German-based HVB Group’s structured credit portfolio management effort, through which he built and managed the bank’s first CLO equity portfolio, according to DFG’s website.

Hilf is chief risk officer on DFG’s credit committee, with a background in quantitative analysis on the HVB loan and structured credit portfolio at that time.

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