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Seix sponsors first 2020 CLO with $406.4M loan portfolio

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Seix Investment Advisors is the first manager out of the gate for 2020 with a new collateralized loan obligation portfolio.

According to a presale report from S&P Global Ratings, Seix is sponsoring a $406.4 million Mountain View CLO XV deal of broadly syndicated leveraged loans, with a two-year noncall and five-year reinvestment period. The deal will build the manager's CLO portfolio assets under management to $3.8 billion.

Seix will market a $244 million tranche of triple-A Class A-1 notes with a coupon of Libor plus 140 basis points.

The Class A-1 notes are subordinated by a supporting senior tranche of AAA-rated notes (Class A-2 totaling $12 million), two Class B tranches totaling $48 million, three lower tranches of Class C ($20 million), D ($23.8 million) and E ($20.2 million) notes, plus $38.4 million in unrated Class A and B subordinated notes that will be retained.

Seix will limit the total of “cov-lite” loans lacking maintenance and other lender-enforced governing covenants on the loans to no more than 60% of the portfolio’s assets during the life of the deal.

According to S&P, the Mountain View XV deal will have a higher weighted-average spread of 3.89%, compared to 3.52% of CLOs rated by S&P in the last three months, providing an available excess spread of 1.74%.

The deal was placed by Goldman Sachs.

The transaction is the first deal for a year that many observers are forecasting a year-over-year decline in new-issuance supply volume for CLOs, which ended 2019 at $118.8 billion, according to JPMorgan leveraged-finance research.

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CLOs CDOs Leveraged loans Goldman Sachs