Carlyle US CLO 2022-4 Overview: Portfolio, Ratings, and Transaction Details

Carlyle US CLO 2022-4: A Closer Look at the Latest Cash Flow Collateralized Loan Obligation

In the world of finance, Carlyle US CLO 2022-4 is making waves as a managed cash flow collateralized loan obligation (CLO) backed by a $550 million portfolio of non-investment-grade broadly syndicated loans and other assets. Moody’s Ratings has provided insights into this intriguing financial instrument, shedding light on its structure and potential impact on the market.

Carlyle US CLO 2022-4 is set to issue several classes of notes to refinance all the secured debt of the existing transaction. These notes will receive quarterly interest payments and, after the reinvestment period, principal payments in order of seniority. Additionally, the CLO includes subordinated notes that receive payments from residual interest and principal proceeds, adding another layer of complexity to this financial product.

Fitch Ratings highlights that the loan portfolio consists mainly of first-lien senior secured leveraged loans, with a small percentage allocated to second lien loans, unsecured loans, and permitted non-loan assets. This diversification strategy aims to mitigate risk and enhance the overall performance of the CLO.

Carlyle CLO Management remains at the helm of Carlyle US CLO 2022-4, with Goldman Sachs serving as the underwriter and U.S. Bank Trust Company, National Association acting as the trustee. The deal closing date is set for July 25, 2024, with a legal final maturity date of July 25, 2036.

Both Moody’s and Fitch have provided ratings for the various classes of notes, with Moody’s assigning a provisional AAA rating to the class A-1-R notes and Fitch assigning expected ratings ranging from AAA to BB for different classes of notes. These ratings reflect the credit quality and risk associated with each tranche of notes.

Despite some concerns raised by Fitch regarding the portfolio composition, including industry and obligor concentrations, the overall level of diversity in the portfolio is deemed to be in line with other recent CLOs. The top industry concentrations include technology software, business services, banking and finance, healthcare providers, and gaming and leisure and entertainment.

In conclusion, Carlyle US CLO 2022-4 represents a complex yet potentially lucrative investment opportunity for those willing to navigate the intricacies of the CLO market. With the support of reputable institutions and a diverse portfolio, this financial instrument has the potential to deliver attractive returns for investors.