Guggenheim Preps Debut $400 Mln CLO
Wachovia Securities is marketing a $400 million collateralized loan vehicle for Guggenheim Investment Management, run by a triumvirate of ex- J.H. Whitney & Co. loan pros and using funds from the Guggenheims and other families. Todd Boehly, Steve Sautel and Adrian Duffy, managing directors for the investment shop, left J.H. Whitney at the start of the year. The debut vehicle, titled Guggenheim 1888, is one-third ramped-up and the eventual mix will be 90% loans and 10% bonds, said a banker. Boehly declined comment on the vehicle.
After a tough summer for buysiders and CLO managers, the funding gap--the difference between the underlying collateral and liabilities--has been widening in recent weeks, presenting a great opportunity for managers to ramp up CLOs, said an analyst. The source familiar with the Guggneheim plans cited the opportune funding gap as the primary reason for the timing behind the vehicle. The CLO will target BB names, though will also buy single B credits, said the source. Double B and single B rated institutional loan spreads have widened to LIBOR plus 318 and 404 basis points respectively.
While at J.H. Whitney, the team managed bank loans and prior to that Boehly was a banker at Credit Suisse First Boston. It could not be ascertained if the loan pros have been replaced at J.H. Whitney. Questions were referred to Michael DeFlorio, managing director, who did not return calls. Officials at Wachovia also did not return calls.