Foothill Group is doing its first collateralized loan obligation in more than six years. Foothill CLO I is a $500 million portfolio led by Deutsche Bank. The portfolio is expected to price Jan. 23. The firm's main focus is its vulture funds and Jeff Nikora, executive v.p., said it was just waiting for the right time to do another CLO. "It wasn't attractive for us," he said about recent market conditions.
Foothill runs a $3 billion book with its focus on the vulture funds, Foothill Partners 2, Foothill Partners 3 and Foothill Partners 4. Foothill Partners 1 was liquidated several years ago.
The Santa Monica, Calif.-based firm began doing CLOs in 1998 and completed its second CLO in 2000. Credit Suisse led Foothill's first two deals, Foothill Income Trust 1 and Foothill Income Trust 2. Deutsche Bank was chosen this time around because Foothill's principal relationship at CS was Michael Lamont who now works at the German bank. A call to Lamont was not returned.
The new CLO has approximately a 15% bucket for second liens and a 5% bucket for bonds, though Nikora doesn't anticipate using them right away. The portfolio management team also includes Denis Ascher, Mike Bohannon and Sean Dixon. Nikora anticipates Foothill will be doing another CLO soon, potentially in the first or second quarter of this year.