Wellfleet closes third CLO with $406m in commitments

The Connecticut-based credit business now manages $1bn across three CLOs.

Wellfleet Credit Partners has closed a $406.1 million collateralised loan obligation, the company announced Thursday.

The CLO is Wellfleet’s second this year and third CLO issuance. The firm, the performing credit business of private investment firm Littlejohn & Company, closed its first CLO in 2015.

The latest CLO vehicle will have a two-year non-call and a four-year reinvestment period with a final maturity of 12 years. The CLO is backed by syndicated senior secured loans, including a set of Fitch-rated AAA senior notes. The fund surpassed its original target of $400 million.

Brian Ramsay, president of Littlejohn, said in a statement that the transaction received commitments from existing investors, but it also expanded Wellfleet's investor base. Several undisclosed investors, Littlejohn funds and partners invested in the vehicle.

Wellfleet will retain equity through its parent firm to comply with upcoming US risk retention regulations, rules that will kick in on 24 December and require some lenders to retain a percentage of qualifying loans on their balance sheet.

With this close, the credit business will now manage a total of $1.1 billion in aggregate across its three CLOs. This April, Wellfleet held a final close of its Wellfleet CLO 2016-1 with total capital commitments of $358.5 million, meeting their goal. The firm debuted its first CLO last September with $360 million in commitments.

Greenwich, Connecticut-based Littlejohn & Co. is a special situations investor putting money into mid-market companies with equity and debt investments. It launched Wellfleet Credit Partners last year as part of its debt management business.