GSC Group files for bankruptcy, reports Bloomberg

Credit manager GSC Group has filed for bankruptcy, according to Bloomberg. It says the firm, which was once one of the biggest CDO managers, has debts of $313.6 million. According to the article, the manager is negotiating the sale of its assets to Black Diamond Capital Finance, which is also the agent for its secured lenders.

GSC was one of a number of CDO managers which borrowed at the management company level, with the loans secured by its fee income. Like most CDO of ABS managers, its fees were slashed dramatically when most of its structured finance CDOs hit events of default.

The New York-based firm also has a loan management business, and these CLOs are likely to be its most valuable asset. The company recently transferred management of one of its CLOs and a permanent capital vehicle to Saratoga Investment.