Newfleet Asset Management, an affiliate of Virtus Investment Partners, has closed a USD356.3 million collateralised loan obligation (CLO).
Newfleet CLO 2016-1 will be backed by a diversified portfolio of broadly syndicated senior secured floating rate loans, with six classes of notes rated by Moody's and S&P and unrated subordinated notes. The CLO will have a two-year non-call and a four-year reinvestment period with a final maturity of 12 years. Newfleet's parent, Virtus, retained 100 per cent of the subordinated notes.
David L Albrycht, CFA, Newfleet's president and chief investment officer, said the successful offering marks the first transaction for Newfleet's CLO platform, which is led by Frank Ossino, senior managing director and lead portfolio manager of the CLO, and Kyle Jennings, senior managing director and head of credit research.
Newfleet's CLO platform, which has approximately USD2.2 billion in bank loan assets including Newfleet CLO 2016-1, leverages the manager's infrastructure and its strong bank loan investment capabilities.
"One of our key strategic initiatives is the build-out of a CLO platform that can benefit from our competitive advantages, including our experienced team, well-established bank loan investment capabilities, and access to capital to ensure compliance with risk retention rules," says Albrycht. "We appreciate the support this offering received from investors, and the partnership Newfleet has with Wells Fargo, which was the arranger for the CLO."
Michael Angerthal, executive vice president and chief financial officer of Virtus, adds: "We are pleased that the Newfleet team was able to execute their first CLO transaction despite a challenging environment for new issuances. This transaction, including our USD36.3 million investment in subordinated notes, demonstrates Virtus' commitment to utilising our capital position to facilitate growth for our affiliates."