New York, May 6th, 2008: The Blackstone Group (NYSE:BX) today announced the closing of three newly created collateralized loan obligation funds (“CLOs”) totaling $1.3 billion, all created over the past month. In March, the firm merged its pre-existing CLO management group with the team from its newly acquired GSO Capital Partners. The 35 person CLO team maintains offices in New York and London.
With this new capital, the combined CLO group manages $14.0 billion across 26 funds in the US and Europe. The new CLOs closed by the group were Columbus Park ($400 million) on April 3rd, Riverside Park ($500 million) on April 15th and Tribeca Park ($400 million) on May 1st.
According to Standard and Poors', during the first three months of 2007, 48 CLOs were created with total volume of $24.8 billion, compared to only 11 new CLOs with aggregate volume of $6.0 billion in the first three months of 2008, a drop of 76%. While all aspects of the credit markets have experienced a degree of dislocation, Blackstone believes the limiting factor in creating new CLOs is most directly related to the lack of supply for the CLOs’ most senior capital tranche, AAA-rated liabilities. These liabilities represent approximately 70% to 75% of a generic CLO’s capital structure and recently have been available to only the most highly regarded asset managers.
“The market’s positive reception to our recent offerings demonstrates the growth potential for our CLO business”, said Bennett Goodman, Senior Managing Director and head of Blackstone’s GSO division. Goodman continued, “These investment vehicles are very different from most CLOs issued recently. They have been established to buy high quality loan assets with an expectation for stable returns to all investors in the CLO’s capital structure. This is in contrast to the majority of CLOs issued since last summer, which were established primarily to move risky assets off banks' balance sheets.”
SVP Corporate Communications
The Blackstone Group, New York
+1 212 583 5559
VP Corporate Communications
The Blackstone Group, London
+44 (0)20 7451 4000
About The Blackstone Group
The Blackstone Group L.P. is a leading global alternative asset manager and provider of financial advisory services. Its alternative asset management businesses include the management of corporate private equity funds, real estate funds, funds of hedge funds, mezzanine funds, senior debt vehicles, proprietary hedge funds and closed-end mutual funds. The Blackstone Group L.P. also provides various financial advisory services, including corporate and mergers and acquisitions advisory, restructuring and reorganization advisory and fund placement services. Further information is available at http://www.blackstone.com/