CIFC reveals CLO proceeds after completing sale

CIFC has announced that it has sold its management position in DFR Middle Market CLO. As well as selling the managerial contract, the firm says it has also sold the deal's entire $50 million equity tranche and $19 million of class D notes. The sale price for the CLO assets as well as the managerial mandate registered at $36.5 million, according to CIFC.

The implied price of well below par for the equity no doubt reflects the fact that DRF Middle Market CLO is well outside its reinvestment period. Equity stakes in other out-of-reinvestment CLOs have been bid in the mid to high 50s recently- see Investor puts controlling CLO equity positions up for auction. The total return for CIFC as equity investor seems to have been strongly positive: according to a filing in November, the DFR CLO has paid $48.1 million in equity distributions to date.

The DFR CLO was launched by Deerfield (which later merged with CIFC) in July 2007, and reached the end of its investment period in July 2010.

CIFC announced plans to sell the CLO last year and it adds that the sale represents the completion of its intention to reposition its core business as an asset manager. Last month CIFC also completed the sale of Gillespie CLO, its sole European CLO, to BNP Paribas Leveraged Finance.