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SecuritizationSecuritization Polls and Awards

Middle Market CLO Deal of the Year - Golub Capital Partners CLO 45(M)

In the GlobalCapital poll for our 2019 US Securitization Awards, Golub Capital with Morgan Stanley as arranger of the Golub CLO 45(M) deal nabbed 28% of the votes, taking first place among the four deals nominated. Golub Capital has a 15-year track record of managing CLOs and has been the leading middle market CLO issuer by volume for each of the last seven years, according to Creditflux data. This is Golub Capital’s seventh award in the past seven years for recognition in the CLO space.


It is not hard to see why the market appreciated this deal. It was successfully executed with strong structuring and distribution, as seen by a global book of investors across various types of accounts. Moreover, due to strong investor demand, Morgan Stanley upsized the transaction from $650m to $730m. This deal was priced amid the market volatility of August 2019. During this month, the US yield curve inverted for the first time since the financial crisis on the back of increasing tensions between the US and China, riots in Hong Kong and weak global growth. Given the overall market uncertainty, in the transaction there was more demand for the senior, investment grade-rated tranches as investors focused on positioning themselves defensively. The Class A senior secured floating rate notes came with a coupon of 172bp over 3-month Libor.

“Morgan Stanley successfully syndicated this transaction to a global investor base, with participation from US, Asia and Europe. We distributed this transaction to a broad range of institutional investors, including insurance companies, banks, asset managers and pensions” says Rachel Russell, head of CLO/ABS/RMBS syndicate at Morgan Stanley in New York. “Morgan Stanley is also known for our structuring expertise and familiarity with the needs of our European clients.  On this transaction, we worked closely with Golub Capital to structure the transaction such that we could distribute it to European investors, resulting in best-in-class execution.”

“One of the key strengths of the CLO asset class is the ability for the collateral manager to actively manage the portfolio of loans over the fund’s reinvestment period,” says Loris Nazarian, head of CLO structuring at Morgan Stanley in New York. “This active management allows the manager to leverage its deep expertise and rigorous credit underwriting process to carefully source and select attractive loans. It allows them to manage the pool in a way that strives to add value over time and mitigate potential losses from deteriorating credits.”

Founded in 1994, Golub Capital today has over $30 billion of capital under management and a team of over 500 employees, including over 130 investment professionals. It is an active issuer of both middle market loan and broadly syndicated loan securitizations. “Golub Capital appreciates the confidence that securitization investors continue to place in our middle market direct lending platform,” says Craig Benton, head of structured products at Golub Capital. “We are proud to be recognized for the success of this transaction, and we are grateful for our longstanding partnership with Morgan Stanley. We look forward to delivering consistent, reliable performance for our securitization investors.” 

As a testament to Golub Capital’s platform, Morgan Stanley was able to help cultivate new investor interest. “Golub is well known for this product, so unearthing new demand takes time, requires diligence and a deep connectivity with the global investor base,” says Kylie Duff, executive director within the CLO syndicate team. “As a result of our syndication strategy and process, we were able to able to onboard non-domestic interest that was new to the manager’s platform and could help them continue to grow long term.”

Morgan Stanley is a leading arranger in both broadly syndicated and middle market CLOs.  Since 2012, Morgan Stanley has successfully arranged over $156 bln of deals across 305 CLOs and 79 managers globally.