Clearlake raises $1B in restructured fund-backed debt deal
What's the deal? Clearlake Capital GroupDealroom has a profile for this one. Try Dealroom → has raised $1 billion through a collateralised fund obligation (CFO) backed by stakes in its private market funds, according to BloombergDealroom has a profile for this one. Try Dealroom →. The deal was restructured after talks with prospective investors, with Goldman SachsDealroom has a profile for this one. Try Dealroom → acting as sole structuring and placement agent.
How is it structured? A newly created Clearlake vehicle will hold $600 million of private credit exposure, $200 million of interests in a private equity secondaries fund, and US$129.4M private equity fund stake. Those assets collateralise $775 million of Class A, B and C debt securities, with the remaining $225 million raised through an equity tranche.
Why the redesign? The transaction was revised to change the mix of backing assets, cut leverage, and improve pricing, people familiar with the deal told Bloomberg. An earlier proposal combined three private credit funds with two other funds, but investors flagged concerns about leverage.
What changed on pricing? The restructuring lowered the cost of senior debt. Class A bonds were priced at 285 basis points over the Secured Overnight Financing Rate (SOFR) — 15 basis points below the original terms — while Class C notes carry a spread of 800 basis points. The equity tranche is expected to generate an internal rate of return of about 18%.
The signal: At $1 billion, the raise ranks near the top of debt rounds, above the 95th percentile among the 14,004 such deals tracked over the trailing 48 months. It underscores how large managers are turning to securitisation to unlock liquidity from private market holdings.
Read more: privateequitywire.co.uk
Image credit: Jo@net
