GoldenTree expands new CLO platform to Europe
GoldenTree Loan Management is marketing its first euro-denominated CLO, just over a year after launching as the new dual-market CLO manager affiliate of GoldenTree Asset Management.
According to the ratings agency press releases, GoldenTree Loan Management EUR CLO 1 DAC is a planned €400 million portfolio primarily of European leveraged loans and bonds.
The offering circular was issued by Citibank, according to the London offices of Fitch Ratings and Moody's Investors Service.
The deep roster of 11 note classes includes triple-A rated tranches: €162 million in Class A-1A notes and €49 million in Class A-1B notes - both floating rate - and €30 million in Class A-2 fixed-rate notes. The deal will have a four-year reinvestment period and a weighted average life of approximately 8.5 years, according to Fitch.
It is the third overall deal for the GoldenTree Loan Management (GLM) arm of GoldenTree, the $26 billion-asset firm led by Chief Investment Officer Steven Tananbaum.
GoldenTree Asset Management announced its new CLO strategy in January 2017 to both invest in and manage its cross-market CLOs in the U.S. and Europe. GLM said it planned to invest in both the equity and junior mezzanine tranches of its portfolios. For the new CLO, the manager will hold €31.8 million in unrated notes for risk retention.
The first two CLOs from the new GLM platform were issued in the U.S. market totaling more than $1.4 billion, and were structured to be dually compliant with both European and U.S. risk-retention regulations. The new platform also debuted with $600 million in committed funds from investors, including insurance firms, pension funds, sovereign wealth funds and family offices.
The release from Fitch’s office did not detail whether the new European CLO would comply with U.S. risk retention regulations, which are likely to be taken off the books this spring after a U.S. appeals court ruling on Feb. 9 found the Dodd-Frank Act regulation should not apply to the CLO asset class. Federal regulators have not announced whether they plan to appeal the D.C. circuit court decision.
GoldenTree previously issued U.S. and European loans under its GoldenTree Loan Opportunities shelf. The company, prior to GLM EUR CLO 1, had issued and managed $11.5 billion of global CLOs since 2000.
GoldenTree is a specialty asset management firm focusing on high-yield bonds, leveraged loans, distressed debt, structured products, credit-themed equities and emerging markets, according to the firm.