THL issues second CLO of the year

The issuance comes less than two months before rules requiring managers to hold 5 percent of risk from a CLO.

THL Credit Advisors has issued a $656 million collateralised loan obligation, the Boston-based firm announced, putting it over the $5 billion mark in CLO issuance over less than four years.

The deal, led by Morgan Stanley, comes as THL’s second CLO of the year and its tenth completed post-financial crisis. The firm previously closed a $608 million transaction, this time led by RBC Capital Markets, in June. The announcement did not provide any details on the assets securing the CLO.

According to Leveraged Commentary & Data, CLO issuance has been up in recent months, ticking up slightly in July and August from June’s reported amount of just over $5 billion before jumping to slightly more than $10 billion.

The clock is also ticking on time for issuing CLOs before risk retention rules kick in 24 December, giving fund managers a holiday gift that requires them to hold 5 percent interest in the credit risk of the securitised assets.

THL Credit is an alternative asset manager with $7.2 billion in assets under management. The firm pursues direct lending and tradable credit strategies through public and private vehicles, separately managed accounts, commingled funds and collateralised loan obligations. The firm is headquartered in Boston and maintains offices in Chicago, Houston, Los Angeles and New York.