Patriarch Partners, a distressed debt firm with more than $4 billion in assets, plans to take over management of three outstanding collateralized debt obligations. Additionally, Patriach is the manager of a loan-backed CDO that is the first of its kind, according to Lynn Tilton, a partner and founding principal. She says Patriarch is in the process of assuming control of Amara-1 Finance, Amara-2 Finance and Oasis Collateralized High Income Portfolios-1, three seasoned portfolios, based on investors' requests. "They believe that Patriarch, as a platform with distressed asset experience, is best suited to manage these portfolios due to the stressed and distressed nature of much of the collateral," she explains. She declined to reveal the current managers of these transactions and they could not be determined by press time.
The firm recently wrapped up its Zohar CDO 2003-1 offering, a $750 million vehicle that is the first actively managed securitization of purely distressed loans with a five-year reinvestment period, Tilton says, adding she holds a U.S. patent on the structure. CDC IXIS Capital Markets underwrote the transaction.
Christopher Howley, a director at Standard & Poor's, says Zohar is the first portfolio of assets made up of credits in various stages of workout. "This includes credits that have yet to file for bankruptcy, that are on the verge, to those that are being worked out and credits that are emerging," he explains.