KKR

KKR is sponsoring its first middle-market CLO transaction stemming from its direct lending partnership established last year with FS Investments, according to presale reports.

The transaction is one of only three CRE CLOs issued post crises with a collateral balance of $1.0 billion or more, according to Kroll Bond Rating Agency.

The holdings demonstrate “resiliency over several credit cycles, with low realized principal losses and robust returns for CLO equity,” managers say.

The gap between long and short reinvestment periods for U.S. collateralized loan obligations that reset rates has widened in 2018 as managers contend with different market signals, says Fitch.