Golub Capital launches a $250 million mid market CLO

Golub Capital will look to launch its second CLO in the space of four months, according to rating agency reports. The manager is close to closing Golub Capital Partners CLO 12, a $250 million mid market transaction which is arranged by Wells Fargo. The manager’s last foray into the primary CLO market was for Golub Capital CLO 10, a broadly syndicated deal which was jointly put together by Wells Fargo and Mitsubishi UFJ. That deal priced in September.

Notably, the new CLO provides 42.4% subordination to the senior tranche, which is much lower than on a couple of recent middle market deals. Ivy Hill Middle Market III and TICC CLO by comparison provided roughly 54% credit protection to the triple-A tranche.

The lower subordination levels has not however been reflected in higher coupons. Senior noteholders will pick up a quarterly coupon of 200bp over Libor – matching the print on the Ivy Hill mid market deal.

Golub 12 has been formed along tight guidelines. At least 95% of the collateral pool will be formed of senior secured loans with the remainder made up of second lien loans. Investment in any other type of asset will not be permitted.

The new CLO will have a legal maturity of 10 years. It will also have a three year reinvestment period and two year non-call period.   

Golub Capital Partners CLO 12