GC Investment prices; middle-market pace steady; issuance slowed by summer, loan supply

By Cristal Cody

Tupelo, Miss., Aug. 4 – GC Investment Management LLC brought its second middle-market CLO deal of the year, a $558.34 million transaction.

July saw $867 million of middle-market CLO transactions, down from the $1.19 billion priced in June, while May saw no deals, according to a BofA Merrill Lynch market note.

Year to date, CLO managers have priced $3.83 billion of U.S. middle-market CLOs, compared to $6.97 billion priced in 2014, the note said.

In the broadly syndicated CLO primary market, the slower summer months and “limited loan supply will continue to constrain primary issuance in the near-term,” the BofA Merrill Lynch analysts said.

GC Investment Management priced $558.34 million of notes due Aug. 5, 2027 in the Golub Capital Partners CLO 25(M) Ltd./Golub Capital Partners CLO 25(M) LLC transaction, according to a market source.

In the senior tranches, the CLO priced $269.75 million of class A-1 floating-rate notes at 99.19 with a spread of Libor plus 180 basis points and $30 million of class A-2 floating-rate notes at par with a spread of Libor plus 182 bps. The class A-2 notes step up to Libor plus 217 bps after 24 months from the closing date.

Wells Fargo Securities LLC arranged the transaction.

GC Investment Management will manage the CLO.

The CLO is non-callable until Aug. 5, 2017. The reinvestment period ends Aug. 5, 2019.

The transaction is backed primarily by middle-market senior secured loans.

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