Wellfleet closes $359m CLO

Stamford- based Wellfleet used an MOA to bring the new vehicle into US risk retention compliance.

Wellfleet Credit Partners has closed on a $358.5 million CLO, the firm announced Thursday (21 April). Wellfleet CLO 2016-1 will be backed by a portfolio of syndicated senior secured loans and have a two year non-call and a four year reinvestment period with a final maturity of 12 years.


In order to be in compliance with upcoming US risk retention requirements, Wellfleet will retain equity through a majority owned affiliate.


Wellfleet was established last year as the preforming debt business of Littlejohn & Co., which along with its partners, invested in Wellfleet CLO 2016-1. The company's previous CLO, Wellfleet CLO 2015 – 1, closed on $360 million in September of last year.


“The execution of Wellfleet CLO 2016-1 certainly benefitted from investors' recognition of the performance of Wellfleet's 2015 vintage CLO,” Littlejohn president Brian Ramsay said in a statement.


Six classes of notes rated Aaa through Ba3 by Moody's, two classes of notes rated AAA by Fitch totaling $324 million and $34 million of subordinated debt were placed in Wellfleet CLO 2016-1. The largest portion of the issuance ($227.5 million) is in Class A triple-A/Aaa rated notes priced at three-month Libor plus 175 bps. The rest of the capital structure comprises:


$2 million in Class X notes rated triple-A/Aaa priced at 100bps over three-month Libor;


$38.5 million in Class B notes rated Aa2 priced at 265bps over three-month Libor;


$21 million in Class C notes rated A2 priced at 365bps over three-month Libor;


$17.5 million in Class D notes rated Baa3 priced at 557bps over three-month Libor;


$17.5 million in Class E notes rated Ba3 priced at 858bps over three-month Libor.


Morgan Stanley acted as the arranger while Dechert was the legal advisor on Wellfleet CLO 2016-1.


A Wellfleet representative did not respond to questions seeking further comment by press time.


Littlejohn & Co., is a private equity firm focused on investing in mid-market companies undergoing changes in capital structure, strategy, operations or growth. It is currently investing from Littlejohn Fund V, which has $2 billion in capital commitments and has counted the $32 billion Maryland Retirement System among its investors in its previous funds. The company was founded in 1996 and is based in Greenwich, Connecticut.