Golub returns with supersized middle-market CLO
Golub Capital Partners is issuing its first middle-market CLO in a year, in a deal more than double the size – with fewer asset restrictions – than that February 2017 transaction.
Golub Capital Partners CLO 36 is a $903.8 million pooling of small and medium-size enterprise secured corporate loans. The transaction will be managed by a Golub affiliate, GC Investment Management.
The senior Class A notes offered total $489.6 million, and pay Libor plus 130 basis points, compared to the 185-basis-point coupon that Golub obtained for the Class A notes in its $411.4 million Golub 34 middle-market CLO.
Golub’s most recent transaction (Golub 35) was a $500 million portfolio of broadly syndicated loans that was closed in July 2017.
Golub 36 has more than a size and price difference with Golub 34. The cap on covenant-lite loans has been increased to 12.5% from 10%, the covenanted WAL boosted to nine years from eight, and the AAA notes have a minimum covenanted average recovery rate of 42%, versus 43% in Golub 34.
Golub 36 has a weighted average spread of 5.95%, slightly higher than last year’s transaction, as well as a higher excess spread of 4.36%, compared to 3.52%.
GC Investment Management has 19 CLOs outstanding, totaling about $10.6 billion in assets under management.