March 2021 | Issue 232
Past returns
Highland sells European CLOs at second attempt
In Creditflux 10 years ago, we reported that Highland Capital Management was offloading its European CLOs, with Alcentra and Barings among the frontrunners. But Highland rejected all bids before restarting the auction in late 2011. Carlyle Group emerged as the winner, securing €2.1 billion of CLOs.
Fresh from the coronavirus crisis, several CLO managers are looking to exit the business. But these leavers are outweighed by the number of managers looking to get in, with a flurry of debutants in the past few months. Meanwhile, Highland — once the largest CLO manager globally — is in bankruptcy proceedings.
Points up front
Revlon repayment was Bad Day at the office
Making light of a situation is a good coping mechanism when things don’t go as expected. The Revlon loan repayment saga has underlined this with court filings revealing how CLO portfolio managers reacted to what Citi purported was a ‘mistaken’ $900 million paydown of Revlon loans.
An exchange between officials at HPS Investment Partners (presumed to be CLO portfolio managers based on their chat IDs) jokingly referred to the payment as the “Downside of working from home. Maybe the dog hit the keyboard.”
A second portfolio manager suggested Daniel Powter’s 2005 hit song Bad Day was playing in the background when the payment was processed, though its lyrics seem to suggest technology may have caused the error.
Powter: his hit Bad Day predicted Citi’s woes: “Sometimes the system goes on the blink and the whole thing, it turns out wrong”
A gander at Recette’s reset
The paths of a CLO and the restaurant it was named after are entwining after Invesco reset its 2015 CLO, Recette, last month. The deal, like other Invesco US CLOs, is named after a restaurant in Manhattan, but Recette closed its doors in 2006, with owner Jesse Schenker tweaking his approach and taking his staff to a new kitchen named Gander.
“Recette will live on in Gander’s dining room,” he said in local media reports at the time. It sounds a lot like a CLO reissue to us.
“I incubated what became AGL inside a family office”
On Creditflux’s CLO webinar last month, AGL founder Peter Gleysteen reveals that the fastest-growing CLO manager in the business started life as part of the family office of private equity pioneer Thomas Lee.
Global credit funds & CLO's
March 2021
| Issue 232
Published in London & New York.
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