Startup CLO management firm HalseyPoint has launched its debut CLO, complete with a multiple senior-note tranche structure as well as combination notes offering.
The $458.87 million HalseyPoint CLO1, via JPMorgan, is the first deal by the firm that was launched in May 2018 by two former Columbia Asset Management portfolio managers.
The capital stack includes five Class A tranches, with three carrying AAA ratings from Kroll Bond Rating Agency. The Class A-1-A1 notes total $217.5 million with a floating-rate coupon of 135 basis points over three-month Libor. The A-1-A2 notes totaling $8 million carry a fixed 3.11% interest, and the Class A-2-A notes sized at $50 million also are priced at 135 basis points plus Libor.
Additional senior notes include $12.83 million in Class A-1-B notes and $4.1 million in Class A-2-B notes. Neither are rated by Kroll.
The deal also has $84.86 million in combination notes with a principal-only BBB- rating; the tranche includes a 90.5% portion of the Class C notes sized at $25 million and all of the Class D notes totaling $26.55 million. 81.6% of the subordinated notes totaling $33.31 million.
HalseyPoint is headed by co-founders and managing partners Lynn Hopton and Yvonne Stevens, both veterans of Columbia Asset Management. While leading Columbia Management Investment Advisors. the pair managed 22 CLOs totaling more than $12 billion.
The El Sugundo, Calif.-based firm officially launched on July 1, months after completing a capital investment agreement with privately held insurer A-CAP.
A-CAP, which owns annuity/life firms Sentinel Security Life and Atlantic Coast Life, as well as long-term-care insurance provider Ability Insurance Co., is providing the equity and debt capital to anchor the firm’s initial CLO deals.
Hopkins and Stephens announced plans for the firm in May 2018, after co-leading the CLO operations at Columbia Management for 18 years overseeing 22 CLOs totaling $12 billion in assets under management.
HalseyPoint’s arrival occurs as the insurance industry’s impact on the CLO industry continues to ramp up. In 2018, insurance giant AIG returned to CLOs for the first time since the financial crisis after acquiring alternative asset manager Covenant Credit Partners.
And CBAM Partners in New York became one of the most prolific CLO issuers in its first three years with more than $12 billion in deals, with shared-service support from private equity parent Eldridge Industries – which also sponsors Security Benefit Life.
