BDCs From Carlyle, Sixth Street Team Up on Venture to Issue CLOs

Business development companies run by Carlyle Group Inc. and Sixth Street Partners set up a joint venture to issue collateralized loan obligations, in a bid to boost returns in a sector where declining interest rates have squeezed earnings.

The venture is launching with $600 million of equity capital commitments, according to a filing from Carlyle. The vehicle will invest in first-lien, senior-secured loans that are “financed with long-term, non-mark-to-market, and predominantly investment grade rated CLO debt,” it said.