GC Investment eyes $903.8 million CLO; European middle-market deals unlikely

By Cristal Cody

Tupelo, Miss., Feb. 22 – GC Investment Management LLC is marketing a $903.8 million new middle-market CLO in the firm’s first transaction of the year.

The CLO manager brought two new CLOs to the primary market in 2017.

Overall, the middle-market space saw more than $14 billion of issuance in 2017, which included new issues and refinancings, according to market sources.

A European middle-market deal pipeline is not expected to develop in the near future, according to Moody’s Investors Service’s February CLO research note following comments during a panel discussion it hosted at a True Sale International GmbH industry conference earlier in the month.

“Participants said they do not believe ... meaningful European middle market CLOs will develop soon like it has in the U.S. owing to scarcity of appropriate collateral in Europe and a lack of a harmonized European insolvency framework, which hampers multijurisdiction transactions,” the Moody’s note said. “In the U.S., private debt activity is far more significant and the country's uniform insolvency law contrasts with a fragmented European landscape.”

Moody’s said the only post-crisis middle-market CLOs it has rated are a series of French deals.

“Between 2005 and 2007, we rated some middle market CLOs, predominantly German transactions, that were subsequently hard hit during the financial crisis,” the note said.

© 2015 Prospect News.
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