Carlyle prices first mid-market CLO

The securitisation was issued by the firm’s business development company and will allow the lender to recycle capital into new lending.

Carlyle’s BDC, Carlyle GMS Finance, has issued its first mid-market collateralised loan obligation (CLO). The $400 million Carlyle GMS Finance MM CLO 2015-1 is backed by mid-market loans originated by Carlyle GMS Finance, and will be used to finance the origination of more assets by the listed firm. 

“Issuing our first middle-market CLO demonstrates the strength of our loan origination platform and our ability to secure attractive financing,” Michael Hart, president of the BDC, said in a statement. 

The securitised structures allow lenders to recycle capital into new lending by selling down assets they have already originated. Most CLOs are backed by assets picked up from the large-cap syndicated leveraged loan market but mid-market CLO issuance is on the rise again in the US after falling dramatically following the global financial crisis. 

Around $7 billion of mid-market CLOs priced in 2014, or six percent of the liquid US BSL CLO market in the US. The proportion of mid-market CLOs was 20 percent in 2007, but more and more issuers are launching mid-market securitizations. 

In May, Chicago-based NXT Capital closed its fourth CLO on $408 million. Last September, mid-market lender Monroe Capital launched its first mid-market CLO since the crisis, a $358 million vehicle. In March, Boston-based NewStar Financial, a regular mid-market CLO issuer, priced a $496 million CLO, its eleventh such vehicle. 

Carlyle GMS Finance, and its affiliate NF Investment Corp, focus on lending to private US mid-market companies. They are part of Carlyle’s global market strategies platform which has $36 billion in assets under management as of 31 March. Carlyle’s middle-market investment team advised $2.5 billion in assets under management across five funds at the end of March. The platform invests via mezzanine and energy mezzanine loans; high yield and structured credit; distressed equity and debt; and four hedge fund strategies. The global market strategies platform employs investment professionals in New York, Washington, DC, Los Angeles, Chicago, Hong Kong and London.

The Carlyle Group is a global alternative asset manager with $193 billion of assets under management across 130 funds and 156 fund-of-funds vehicles as of 31 March.