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February 2022 | Issue 242
Past returns
Ares constructs private CLO
In Creditflux 10 years ago we reported on Ares Management putting together a quasi-CLO in a bilateral transaction involving senior debt investor Sumitomo Mitsui Banking Corporation.
The deal had a two-tranche structure, with SMBC taking down the debt portion and an Ares affiliate retaining the equity. SMBC was said to have a greater say in changes to the portfolio than would otherwise be afforded to a senior CLO debt investor. There were also provisions for the CLO to pay down the senior tranche in the event of par erosion.
In the past few years, private CLOs have taken off, typically as transactions catering to regulated entities. Like the Ares deal, these typically involve middle market loan portfolios.
Points up front
A true rock star lawyer
When corporations proclaim they are looking to recruit ‘rock stars’ (as is common these days), this usually means they are seeking highly proficient candidates for a desk job. But Jones Day leveraged finance partner Lewis Grimm posted last month that the law firm was seeking a “rock star leveraged finance associate” to work out of London — and there’s a chance he means exactly what he says.
A highly regarded levfin lawyer by day, Grimm is sometimes a rocker by night. Exhibits A and B are starring performances on YouTube where he belts out classics such as Johnny B Goode and (I Can’t Get No) Satisfaction.
Grimm’s job posting took inspiration from the Rolling Stones’ classic by putting his twist on the lyrics and referring to a loan transaction where counsel “comes in and tells me, how long my hours can be”. We’re putting in a request for Grimm’s next credit/Rolling Stones mash-up: loan investors lamenting “You Can’t Always Get What You Want” as they negotiate stips.
Grimm (second from left): making a strong case that he can’t get no satisfaction
CLO valuation buzz: to infinity and beyond
Last month it emerged that Eldridge Industries was exploring the possibility of selling part of its majority stake in global CLO manager CBAM. A Bloomberg report suggested that firm was being valued at “$500 million to $1 billion”.
We’re wondering why it didn’t cover its bases and lift the upper limit to infinity.
“The third term is Jinping’s legacy. He does not care about near-term growth”
Pictet’s Jon Mawby says China’s president is looking long term and that could lead to a global growth shock in 2022.
Global credit funds & CLO's
February 2022 | Issue 242
Published in London & New York.
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