A subsidiary of Golub Capital’s business development company (BDC) has priced a twelve-year $400 million CLO, according to a statement on Wednesday.
Golub Capital BDC CLO 2014 has five tranches in the term debt securitisation comprised of the $191 million of class A-1 notes, $20 million of class A-2 notes, $35 million of class B notes and $37.5 million of class C notes as well as an equity tranche of $118.3 million.
Classes A-1, A-2, B and C pay out every three months at Libor plus 1.75 percent, 1.45 percent, 2.50 percent and 3.50 percent respectively. The Class A-2 coupon will increase to 1.95 percent after the first 18 months. The Class C and Equity Interest tranches will be indirectly retained by Golub, the statement read.
The CLO's reinvestment period ends in April 2018 and the notes are due to mature in April 2026.
The CLO is expected to be 70 to 80 percent funded at close with assets that currently secure a revolving credit facility (RCF) with Wells Fargo and other assets that are currently unlevered.
Based upon current Libor rates and including amortisation of costs and fees associated with the CLO, Golub expects an all-in yield of 2.4 percent on the Class A and B notes which compares favourably to the all-in yield of 3.1 percent on the RCF for the three months ended March 2014, it said.
Golub Capital specialises in mid-market lending and has more than $10 billion in assets under management