Blackstone Hits Home Run On Monument CDO

The Blackstone Group's third collateralized loan obligation, the $1 billion Monument Park CDO, priced at the tail end of last year, doubling the loan asset management capacity for the private equity heavyweight.

  • 04 Jan 2004
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The Blackstone Group's third collateralized loan obligation, the $1 billion Monument Park CDO, priced at the tail end of last year, doubling the loan asset management capacity for the private equity heavyweight. UBS is the underwriter for the transaction, which is one of the largest cash-flow CLOs issued in years. Dean Criares, managing director and portfolio manager for Blackstone Debt Advisors, declined comment.

To accommodate the size of the transaction, the vehicle is structured like a delayed-draw loan with an 18-month drawdown. Blackstone will "pay as they go," explained a source. The notes have all been priced, but will be drawn down on a pro rata basis when required. So, for example, the Triple-A notes represent just north of 82% of the vehicle, but only a proportion of this tranche is currently issued. The top-rated tranche priced at LIBOR plus 55 basis points, which is slightly wider than levels seen on recent deals, but sources attributed this to the size of the deal, which is two to three times the size of other CLOs issued this year.

One buyer of CDO paper said one of the attractions of the deal being so large is that the portfolio manager will spend less time on the road raising equity than he would if the firm came out with a few smaller funds that require new fundraising efforts. That allows more time for managing the portfolio. "Managers can be three to six months on the road, not focusing on what they are managing. Dean is sitting in New York on the credit side," he added.

Criares joined Blackstone at the beginning of 2002 from Trimaran Advisors. That year, the firm completed its debut deal, the $600 million Hanover Square CLO with CIBC World Markets and J.P. Morgan. The second deal, completed at the beginning of 2003 was the $400 million Union Square CLO, led by Credit Suisse First Boston. The deals are named after New York parks.

  • 04 Jan 2004

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 BNP Paribas 14,443 29 18.07
2 Bank of America Merrill Lynch (BAML) 8,264 27 10.34
3 Lloyds Bank 7,329 24 9.17
4 Citi 6,748 19 8.44
5 JP Morgan 5,220 8 6.53

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 117,261.12 337 11.09%
2 Bank of America Merrill Lynch 94,721.79 272 8.96%
3 JPMorgan 92,612.23 269 8.76%
4 Wells Fargo Securities 82,597.19 239 7.81%
5 Credit Suisse 69,442.99 183 6.57%