Barings: Lively August May Indicate CLO Second-Half Rally
Adrienne Butler recently spoke with Asset Securitization Report in this Q&A about developments in the U.S. CLO market and her outlook for the remainder of 2023.
Barings issued its 100th managed collateralized loan obligation (CLO) in July, bringing its CLO-asset total to more than $44 billion, a quarter century after its first CLO was completed in 1998 by predecessor First Union Institutional Debt Management (IDM).
The $403 million transaction, led by BNP Paribas, is a middle-market deal securitizing private credits, a rapidly growing segment in 2023's otherwise sluggish CLO market. Later in August, the asset manager, with total assets-under-management of $351 billion, priced a $509 million CLO securitizing broadly syndicated loans (BSLs) from large corporate borrowers that was led by Morgan Stanley, which also arranged a $362 million BSL CLO for Barings in February.
Barings completed a $453 million BSL CLO in May led by Bank of America. It now manages $12.5 billion of BSL CLOs in the U.S. and $5 billion in Europe. It also manages $2 billion middle-market CLOs and $25 billion of investments in third-party CLOs.
In mid-July, Barings announced entering a strategic partnership with Lakemore Partners, a private credit investment firm that invests mostly in super-majority control CLO equity. The partnership aims to promote continued growth of Barings' managed CLOs while deepening Lakemore's institutional client base.
Adrienne Butler, co-head of Barings' U.S. high-yield investment group and head of U.S. CLO funds, responsible for new CLO marketing and formation as well as existing CLO portfolio management. She recently spoke to Asset Securitization Report about developments in the U.S. CLO market and where it may be headed. Prior to joining Barings in 2002, she was a senior analyst at IDM's loan research group.