Last Wednesday, West Gate Horizons closed its second collateralized loan obligation, a $350 million portfolio, Ocean Trails CLO I, led by UBS. West Gate is led by former ING Capital Advisors' alums that came over when the business was bought by West Gate Advisors, a subsidiary of Metropolitan West Asset Management, in 2005 (LMW/7/1/2005). Michael Hatley, president, and Michael Campbell manage the portfolios.
Ocean Trails is about 98% ramped up. The Triple-As priced at LIBOR plus 25 basis points. Its equity piece is $27 million and it has a 5% bucket for second liens. Hatley said the firm last worked with UBS in 2001. "They wanted to do business with us again and proactively structured a deal whereby we called an existing CLO that was past its reinvestment period and used a significant percentage of those assets to ramp up the new CLO," he said.
Hatley said it is already ramping up its third CLO and he expects it will launch in the first quarter of next year, probably around February. "We like to have the deals pretty fully funded when they close, so we don't start marketing till it is significantly ramped up," he said. The firm has chosen a bank, but he declined to name it.
It closed its first CLO, WG Horizons CLO I, a $400 million portfolio led by Credit Suisse, in May.
ING Capital Advisors was on the auction block for about six months before West Gate bought it. At the time, Richard Hollander, chairman and ceo of holding company Metropolitan West Financial, said the firm had managed high-yield and fixed-income assets, but did not have a leveraged loan group (7/1/2005). Hatley, Campbell and Graydon Wilcox, cfo, all members of the management team, came over from ING. The credit team also includes six analysts.