Carlyle Closes $615M CLO, Its Third In ’12

The Carlyle Group continues to push ahead in leveraged credit, announcing that it has closed its third new-issue collateralized loan obligation this year, at $615 million. This CLO is the firm’s largest since it acquired the leveraged lender Churchill Financial Group LLC last November.

The Washington, D.C.-based buyout megafirm closed $510 million new-issue CLOs in March and June. Citibank arranged the latest transaction, the firm said.

CLOs are one of the largest investors in leveraged loans, according to Thomson Reuters Loan Pricing Corp., which tracks the lending market. Arrangers and CLO managers expect that in addition to the $30 billion in CLOs priced so far this year, another $10 billion could be issued by year end and another $50 billion in 2013.

As new CLOs are ramping up, they must buy the majority of their assets upfront, which creates even more demand for new issuance. CLOs are holding roughly 45 percent of leveraged loan outstandings, while retail loan funds are holding 15 percent, LPC reported.

Carlyle’s CLO and structured credit business, which now stands at $16 billion in assets under management, is part of the firm’s Global Market Strategies arm, which had more than $29 billion in assets under management as of June 30. The GMS group invests in mezzanine loans, high yield and structured credit, distressed equity and debt, long/short credit, and emerging market equities and macroeconomic strategies. The GMS group has more than 100 investment professionals.