CLOs

A growing number of asset managers are waking up to the opportunity to lend to small and medium-sized companies, and much of this direct lending is making its way into the securitization market.

The four-year-old transaction is still in its original reinvestment period, but the collateral has had growing levels of defaulted and triple-C rated assets.

The spread on the AAA rated notes issued by KKR 23 CLO is unchanged from the manager's prior deal, but three of four subordinate tranches are priced wider than the June transaction.

Four new repriced portfolios from BlueMountain, CIFC, GoldenTree and HPS each exceeded 10x debt-to-equity ratio, compared to a three-month prior average of 9.16x on S&P rated deals.

Three of the loans backing the $868.4 million BSPRT 2018-FL4 representing 18.4% of the collateral are either still under construction or have yet to be redeveloped, according to Kroll Bond Rating Agency.

While banking regulators are currently looking the other way when corporate debt packages exceed 6.0 leverage, that could easily change under a new administration or Congress.

A conflict between risk retention rules and prohibitions against self-dealing were limiting options for some lenders to hold skin in the game; a no-action letter issued to Golub Capital creates a "clear path" to compliance.

Tetragon Credit Income Partners is considering a move outside its niche CLO equity investment strategy in expanding its portfolio management team.

The Boston-based firm has refinanced two existing deals within the last 10 months, but hasn't printed a new deal since October 2015, well before U.S. risk retention rules took effect.

The deal will be managed through its BDC, which formed a joint venture last December to fund PE-sponsored firms with unitranche corporate loans.