GoldenTree Issues CLO Allowing 40% Bonds

GoldenTree Asset Management raised a collateralized loan obligation of about $590 million that allows for as much as a 40 percent investment in second-lien loans and high-yield bonds.

Bank of America arranged the deal, which is being used to replace a financing for a credit opportunity fund overseen by GoldenTree, which manages $15.9 billion in assets, according to two people with knowledge of the deal, who asked not to be identified because the terms are private.

“I don’t think we have seen anything similar with a composition for such a great allowance of bonds,” since the start of the credit crisis, said Leon Mogunov, a senior credit officer at Moody’s. A CLO is usually allowed to invest between five and 10 percent of its money in bonds, Mogunov said.

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