Two US-based firms announced new European collateralised loan obligations (CLOs) last week, while a third, Sound Harbor Partners, announced the close of a US dollar denominated CLO, its first under a new partnership with Macquarie Credit Investment Management.
On Friday (31 October), Carlyle announced the closing of its European CLO at €450 million, its fifth since the market re-emerged in 2013. It brings the firm's European CLO issuance to €1.2 billion so far this year. Carlyle has also raised roughly $2.73 billion in US CLOs in 2014.
Earlier last week, Apollo Global Management announced that it had priced a new €411 million CLO. ALME Loan Funding III Limited is Apollo’s third European CLO and will focus on investments in corporate leveraged loans. The new vehicle was arranged by Citigroup, according to the announcement.
Apollo has 23 US CLOs totalling over $13 billion in assets under management.
Sound Harbour Loan Fund 2014-1 totals $457 million and will mainly invest in US dollar-denominated senior secured corporate loans. The firm has a strategic agreement with Macquarie for a series of CLO funds.
“Achieving a successful initial close under our strategic relationship with Macquarie marks a major milestone,” said Dean Criares, partner at Sound Harbor. “The relationship with Macquarie allows us to consider opportunistic growth plans across various economic cycles and uncertain regulatory environments.”
JPMorgan arranged the new fund, which together with SHP Capital Solutions Fund and three other CLOs, bring’s Sound Harbour’s assets under management to a total of $1.4 billion.
CLO issuance in the US slumped this year, compared to 2013, after new regulations were enacted restricting investment by banks in the vehicles. Two weeks ago, regulators voted to approve another new rule obliging CLO managers to retain a 5 percent interest in funds they sponsor. European CLOs are already subject to the same 5 percent 'skin in the game' retention requirement.