OFS Capital Management and GSO/Blackstone Debt Funds Management are in the market with collateralized loan obligations, adding nearly $1.1 billion to the new issue pipeline, according to presale reports from Standard & Poor’s and Fitch Ratings.

OFS Capital Management is planning its second CLO transaction of the year; $470.5 million OFSI Fund VII.  The deal will be backed by a revolving pool of primarily broadly syndicated senior secured loans.  As of July 30, 2014, 72.95% of the portfolio’s collateral had been identified.

S&P assigned preliminary ‘AAA’ ratings to the $298.5 million class A notes, which benefit from  subordination of 42.34%.  The notes are being marketed at three-month Libor plus 134 basis points and are expected to mature in October 2026.

The deal has a typical four-year reinvestment period and two-year non-call period.

Nomura Securities International is the arranger.

OSF’s previous deal, the $683 million OSFI Fund VI, was issued in March.  S&P assigned ‘AAA’ ratings to $232 million class A-1 notes.  The transaction is backed by a revolving pool, also primarily of broadly syndicated senior secured loans.

OFS Capital Management has managed three CLO deals, with $15.8 billion in assets under management.  The company, founded in 2010, is wholly owned by Orchard First Source Asset Management, a specialized asset management company that primarily focuses on sourcing, investing in, and managing loans consisting of senior secured leveraged cash flow transactions.

GSO/Blackstone Debt Funds Management is readying Birchwood Park CLO.  Net proceeds from the issuance of secured and subordinated notes will be used to purchase a portfolio of approximately $600 million of primarily senior secured leveraged loans—93% first lien senior secured loans.

Fitch provisionally rated the $375 million class A notes ‘AAA.’  They are being marketed at a spread of 144 basis points over three-month Libor and benefit from a credit enhancement of 37.5%.

Birchwood Park CLO’s 4.2 year reinvestment period and 2.2 year non-call period are in line with recently marketed CLO transactions.

Wells Fargo Securities is the arranger and initial purchaser.

GSO/Blackstone Debt Funds Management, the credit investment business of The Blackstone Group, is one of the world’s largest credit managers focused

 

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