GSC Group recently announced the close of its 13th CDO fund since April 2000. The GSC CDO VIII, LTD is a $350 million collateralized loan obligation that will invest 30% in middle-market loans and 70% in broadly syndicated leveraged loans. The strategy stems from tight pricing in the market, particularly on broadly syndicated deals. The low spreads have made it hard to continue investing in some of these transactions with smaller buckets while still securing a satisfactory yield.
"Given how broadly syndicated loan spreads have tightened, we needed a more efficient vehicle to purchase these types of loans," said Seth Katzenstein, managing director at GSC Group. "In order to do so, we needed a fund with an emphasis on the broadly syndicated loans."