GoldenTree Joins European CLO Pipeline

GoldenTree Asset Management is joining the list of U.S.-based CLO managers marching to Europe.

The firm, which is based in New York but has offices in London and Luxembourg, is preparing a roughly €240 million collateralized loan obligation, according to a presale report published Thursday by Standard & Poor’s.

The deal is backed primarily of euro-denominated senior secured loans and bonds issued by European and U.S. borrowers.  S&P is rating seven fixed-rate and floating-rate tranches of the deal, including three with preliminary ‘AAA’ ratings: one for €82 million, one for €35 million and one for  £15.336 million.

The deal is being marketed despite a policy fight that is threatening the recovery of the European CLO market. A draft paper released by the European Banking Authority in May calls into question what had been a common interpretation of the requirement for sponsors to retain a 5% economic interest in CLO deals. Participants understood that a third party could have this exposure, as long as the interests of this third party were aligned with those of the sponsor.

GoldenTree has $18.3 billion in assets under management, including $4.7 billion in CLOs, according to information posted on the firm’s website. S&P's presale does not indicate what entity will retain an economic interest in its European CLO.