Palmer Square Capital Management, an investment management firm that provides structured credit, corporate credit and hedge fund strategies such as long/short credit to a wide range of investors, has closed on its seventh Collateralised Loan Obligation (CLO).
Palmer Square has been a pioneer in structuring and executing on static pool CLO transactions. The firm closed its first static CLO transaction, on 16 January, 2016 and its second static CLO transaction on June 8, 2016. In total, the transactions amounted to USD400 million in issuance. JPMorgan Securities acted as lead arranger on both transactions. Similar to Palmer Square's five recent transactions, this CLO is designed to invest primarily in institutional senior secured bank loans. The most significant difference, though, is that the static deals do not have a reinvestment period, are fully identified portfolios at closing, and are immediately amortising or short duration.
"We are pleased to have been able to bring the static ABS structure and introduce it to the CLO market. Investors have appreciated the opportunity to invest in a short duration structure in which the debt is floating rate and the portfolio and structure are identified and easier to analyse," says Christopher D Long (pictured), President of Palmer Square Capital Management. "We believe demand for alternative credit solutions such as this from traditional asset backed securities investors and other credit investors continues to be strong as investors are looking for new ways to increase yield in this low interest rate environment without taking significant spread or interest rate risk."
Added Angie K Long, CFA, Chief Investment Officer of Palmer Square Capital Management, says: ”We believe the execution of this investment is testament to the strength of our corporate and structured credit team, diversified platform, and our continued focus on ensuring incentive alignment with our institutional and registered investment advisor clientele. Palmer Square's goal is to continue to exploit relative value opportunities across both traditional and non-traditional credit strategies such as investing in and managing CLOs and long/short credit."