Two new CLOs totaling more than $1 billion have closed in the last week, according to announcements from The Carlyle Group and American Capital.
On Monday, American Capital closed on the sale of $414 million in collateralized loan obligation bonds, which will be managed by the firm’s leveraged finance subsidiary.
“With this new CLO, American Capital Asset Management continues to expand its funds under management and now manages six private funds and two public REITs,” said Malon Wilkus, American Capital Chairman and CEO in a statement.
American Capital Leveraged Finance Management purchased $25.3 million in non-rated equity tranche of subordinated notes and third party investors purchased the remaining $11 million in that tranche, according to a statement. The equity retention is intended to comply with European risk retention rules.
On 28 March, Carlyle’s structured credit team closed its second CLO of the year on $623 million, according to a statement. Morgan Stanley helped raise the fund, which will invest in corporate leveraged loans and high yield bonds.
The firm closed its first CLO of the year in February on $605 million, after closing four others on a total of $2.26 billion in 2012.
Carlyle and American Capital did not respond to requests for comment.
Demand for CLOs has continued to rise in the US in the first quarter of 2013 after a strong 2012, when $55 billion in new CLOs were issued – more than the total combined issuances between 2008 and 2011, S&P Capital IQ analyst Steven Miller told Private Debt Investor in February.
That demand hasn’t carried over across the Atlantic, where sources say the region’s ‘skin in the game’ requirements for European CLOs have subdued appetite, and low M&A volumes have led to a scarcity of suitable CLO-ready credits. Managers in Europe are required to hold an economic interest equivalent to five percent of the total value of the fund.