Blackstone / GSO floating-rate fund to raise funds for loan investing

By Susanna Moon

Chicago, March 31 - Blackstone / GSO Floating Rate High Income Fund registered to sell common shares at $20 each for investment purposes in a N-2 filing with the Securities and Exchange Commission.

The fund plans to invest at least 80% of its managed assets in floating-rate investments including first-lien senior secured floating-rate loans, loans that are not first lien or are not secured by collateral and derivatives that provide for floating-rate payments.

The senior loan investments will typically be speculative grade at the time of purchase.

The fund may invest up to a fifth of its managed assets in fixed-rate income-producing securities including U.S. government debt securities and investment- and non investment-grade, subordinated and unsubordinated corporate debt securities, warrants and equity securities, structured products and derivatives.

The fund may invest up to a quarter of its managed assets in securities or other instruments that are considered illiquid.

The fund also expects to incur leverage as part of its investment strategy. At first, it will be through total return swap or securities lending arrangements. The fund may also reinvest proceeds from the sale of borrowed securities or enter into shorting programs without incurring leverage.

The total leverage plus its total short sales exposure will not exceed 40% of the fund's managed assets.

Under some market conditions, the fund said it may engage in short sales to try to offset risk exposure from the fund's long investment positions. The fund's short positions, either directly or through the use of derivatives, may total up to a fifth of the fund's managed assets.

GSO / Blackstone Debt Funds Management LLC will be the fund's investment adviser.

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