NewMark Capital Funding is marketing its fourth collateralized loan obligation, according to a presale report published Friday by Standard & Poor’s.
NewMark Capital Funding 2014-2 CLO will $363 million of floating-rate and fixed-rate notes, including five classes of notes with preliminary AAA’ ratings from S&P. The $195.75 million class A-2 notes are being offered at Libor plus 144 basis points and benefit from credit enhancement of 39.75%. The $15 million class A2A notes pay Libor plus 150 basis points and benefit from credit enhancement of 47.61%. The $2.25 million class A2B notes pay Libor plus 104 basis points and benefit from credit enhancement of 39.75%
Jefferies is the deal’s arranger.
NewMark, which was founded just over a year ago, in February 2013, has $1.3 billion in assets under management, and that includes assets managed by its affiliate Hillmark Capital Management. It has engaged a much larger manager, Guggenheim Partners Investment Management, as the CLO’s designated back up manager in order to avoid paying a “senior management fee modeling stress of 50 basis points in S&P’s quantitative analysis.
S&P imposes this modeling stress on CLOs managed by firms with less than $2.5 billion in assets.
Guggenheim will step in if NewMark ceases to be the transaction's collateral manager. Guggenheim will also receive all the information it deems necessary to manage the transaction without delay should that become necessary.