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RRE 4 Loan Management DAC: 03 September 2020

The issuer is a managed cash flow CLO, where at least 90% of the portfolio must consist of senior secured obligations and up to 10% of the portfolio may consist of senior unsecured obligations, second-lien loans, mezzanine obligations and high yield bonds.

Redding Ridge’s primary business consists of acting as collateral manager for CLO transactions and related warehouse facilities and as holder of CLO Retention interests in both U.S. and Europe.

Of note is that the issue incorporates a mechanism which will allow the collateralized loan obligation vehicle to participate in distressed rescue financings. This “innovation” has been imported from the US market and is making in-roads into the European market.

The transaction contains language that allows the manager to purchase workout obligations. This provides the issuer with the ability to invest in debt and non-debt assets of an existing collateral obligation offered in connection with a workout, restructuring, or bankruptcy of such an obligation.

The portfolio is expected to be 97.5% ramped as of the closing date.