Prudential Financial takes over two European CLOs

Prudential Financial will take over two European CLOs managed by GSC, GSC European CDO III and GSC European CDO IV, according to an announcement. The two deals, which closed in 2006 and 2007, total around €800 million.

The acquisition, which has been approved by investors, will take place later this month, according to the statement, with Prudential Financial’s London-based CLO team, led by Jonathan Butler, taking over management of the two deals.

The disposal of these two businesses will leave GSC with a total of four European CLOs, according to Creditflux Data+. GSC set up its European loan business around seven years ago, launching its first European CLO in 2003. The manager’s deals have generally performed below the market average, with several failing junior and even senior overcollateralisation tests, according to Creditflux CLO Master. For example, GSC European CDo III started failing its senior par value test in February, and has defaults of 6.6% - well above the 2% average for European deals from 2006.