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PGIM gains control of two CLOs previously managed TCI Capital

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PGIM Fixed Income has assumed control of two collateralized loan obligation portfolios previously managed by TCI Capital Management through a subadvisory agreement with Columbia Management Investment Advisers.

A spokesperson for the $717 billion global asset management arm of Prudential Financial confirmed that the CLO manager has been assigned to take over as manager for the TCI-CENT 2016-1 and TCI-CENT 2016-2 portfolios, each originally issued at $500 million.

Neither deal is to be renamed. The PGIM spokesperson did not comment on what led to the reassignment.

Fitch Ratings reported last week it was told that Columbia “is expected to resign” from its role as the subadvisor, “effectively terminating” the subadvisory agreements for both transactions between Columbia and collateral manager TCI. In turn, TCI would assign manager duties to PGIM through its PGIM Fixed Income unit.

TCI is a subsidiary of Tetragon Financial Group Ltd, and is part of an umbrella of asset management companies under Tetragon’s $25 billion-asset TFG Asset Management. TCI Capital is an affiliate of LCM Asset Management, another CLO collateral manager within TFG.

Both Fitch and Moody’s Investors Service report the transfer will have no impact on their ratings.

TCI-CENT 2016-1 was issued in December 2016. While it was among a rush of end-of-year CLOs that priced before the federal regulatory enforcement of risk-retention requirements for managers, TCI-CENT 2016-1 was closed with a horizontal (or equity stakes) risk-retention feature, according to Fitch Ratings. The deal remains within its 2.1-year non-call and 5.1-year reinvestment period.

TCI-CENT 2017-1 was among three CLOs that TCI Capital closed last year, totaling $1.64 billion, according to Thomson Reuters LPC. (The other deals were the $512.3 million TCI-Flatiron 2017-1 and the $650 million TCI-Symphony 2017-1 transaction, both of which are among the four deals totaling approximately $2 billion still under TCI Capital direction.)

The transferred deal has its non-call period through the third quarter of 2019, and also includes a horizontal risk-retention stake.

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