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Salus Capital Partners Closes $250MM Collateralized Loan Obligation Transaction

February 07, 2013, 08:11 AM
Filed Under: Industry News

Salus Capital Partners LLC announced the closing of Salus CLO 2012-1, Ltd., a $250 million collateralized loan obligation (“CLO”) vehicle. A Salus subsidiary will act as the collateral manager of the CLO, which will invest in senior secured asset-based loans originated by Salus.

“As a first-time issuer, the overwhelming acceptance from institutional investors has been a clear validation of our direct origination engine and comprehensive monitoring platform as well as the vast market opportunity within the corporate middle market,” said Andrew H. Moser, president of Salus Capital Partners, LLC. “Having a like-minded and well versed partner in our niche market position like Natixis Securities, was instrumental in the success of our first offering.”

“The closing of Salus Capital’s inaugural CLO issuance is an important next step for its continued growth” said Phil Gass, Managing Director of Investments of Harbinger Group Inc. “This closing demonstrates Salus’ ability to access broadly based, committed institutional capital as we look to expand our direct lending business.”

As part of the transaction, Salus and its affiliates will contribute to the CLO approximately $221 million of their existing portfolio of loans. Securities with ratings between AAA through BB were placed with third-party investors, and Salus and its affiliates retained the remainder, including the subordinated notes. The CLO will have a reinvestment period of two years, a non-call period of two years and a final maturity of eight years. DBRS, Inc. rated all senior notes issued by the CLO.

Natixis Securities Americas LLC acted as arranger and placement agent for the transaction. Milbank, Tweed, Hadley & McCloy LLP acted as legal counsel to Salus.

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