July 22, 2024

Carlyle US CLO 2024-4 is issuing $509.3 million worth of notes backed by a loan portfolio of $500 million. The cash-flow CLO transaction, managed by Carlyle CLO Management, is backed by a $500 million portfolio of non-investment-grade broadly syndicated loans and other assets which the manager purchases from and trades in the primary and secondary markets, Moody’s Ratings says.

New York-based Carlyle had $426 billion of assets under management and managed a total of 95 CLOs in the U.S. and Europe, as of December 31, 2023.

The manager will actively manage the CLO, purchasing and selling assets throughout the life of the transaction, subject to satisfying certain criteria. The CLO also includes collateral quality tests designed to measure and limit key portfolio characteristics. The proportion of asset types in the CLO’s portfolio, other than ineligible assets, are subject to limitations, expressed as a percentage of the portfolio’s par amount, Moody’s said. 

The CLO must hold a minimum of 90% first-lien senior secured loans and eligible investments.

The loan portfolio is international, with the U.S. having a maximum concentration of 20%, Canada 15%, the Netherlands, Australia, New Zealand and the U.K. (individual) 15%, Germany, Ireland, Sweden and Switzerland (aggregate) 10%, and Austria, Belgium, Denmark, Finland, France, Hong Kong, Iceland, Liechtenstein, Luxembourg, Norway and Singapore (aggregate) 7.5%.

The top five industries that make up 52.9% of the loan portfolio include banking, finance, insurance and real estate; consumer and business services; healthcare and pharmaceuticals; and high-tech industries.

The closing date was June 25, 2024, the latest effective date is December 25, 2024, and the legal final maturity is July 20, 2037.

U.S. Bank Trust Company, National Association is trustee and collateral administrator, and BofA Securities is the underwriter of the issue. 

The class A-1 notes totaling $300 million and accounting for 58.9% share of the capital structure, have received an AAA rating of AAA from Moody’s. The A-1 notes have effective subordination of 40%, and pay a coupon of three-month SOFR (secured overnight financing rate) plus 1.43% on a quarterly basis.

Classes A-2 (three months SOFR+1.63%), B (three months SOFR+1.75%), C (three months SOFR+2.15%), D (three months SOFR+3.2%), E (three months SOFR+5.95%), and one class of subordinated notes are not rated. Subordinated notes totalling $49.3 million will receive payments from residual interest and principal proceeds.

Carlyle 2024-4 is largely similar to other recently closed broadly syndicated loan CLOs, and the manager’s three earlier transactions of 2024 are passing their collateral quality and over-collateralization tests, Moody’s said.


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