NEW YORK--()--Blackstone / GSO Strategic Credit Fund (the “Fund” or “BGB”) (NYSE: BGB) announced the closing of its credit facility (the “Credit Facility” or the “facility”) with the Bank of Nova Scotia.
“We expect secured loans and high yield bonds to end the year on a positive note as the asset classes have returned 9.3% and 14.7%, respectively, year to date based on the Credit Suisse indices.”
The Credit Facility provides availability of up to $425 million. Assuming the facility is fully drawn, the total Fund size could be $1.28 billion based on the current net asset value. The Fund will use the proceeds of the facility to purchase additional assets for the portfolio.
BGB principally invests in credit investments and has a dynamic strategy that provides for flexibility to invest between secured loans or high yield bonds in any ratio, pursuant to the outlook of GSO / Blackstone Debt Funds Management LLC, the Fund’s investment adviser (the “Adviser”). As of December 19th, the Fund is allocated 77% to secured loans and 23% to high yield bonds. The Adviser expects those allocations to remain consistent as proceeds of the facility are drawn, given the Adviser’s current economic and market outlook. Currently, BGB is generating an average unlevered asset yield of 6.2%. Secured loans with a LIBOR floor comprise just over 95% of the current secured loan portfolio, with the average LIBOR floor level of 1.3%. BGB’s current dividend yield is 7.6% and its NAV per share has increased to $19.17, a 0.6% price gain since issuance.
Lee Shaiman, Managing Director of GSO Capital Partners LP (“GSO”), the parent company of the Adviser, and senior portfolio manager of the Fund said, “We expect secured loans and high yield bonds to end the year on a positive note as the asset classes have returned 9.3% and 14.7%, respectively, year to date based on the Credit Suisse indices.
“Corporate fundamentals continue to be favorable and we believe that trend will continue into 2013. Market technicals for secured loans and high yield bonds have further supported credit fundamentals as we see strong demand for these higher yielding asset classes from both institutional and retail investors. Secured loans in particular are among the few fixed income alternatives providing high current income while trading at or near par value. The short duration attributes of secured loans provide additional protection for fixed income investors given the historically low absolute level of interest rates available across the fixed income spectrum. We believe that secured loans and, to a lesser degree, high yield bonds will continue to exhibit good performance and provide compelling risk adjusted returns well into next year.”
Blackstone / GSO Strategic Credit Fund
The Fund is a non-diversified, closed-end management investment company that is managed by the Adviser, a subsidiary of The Blackstone Group L.P. (“Blackstone”) and subsidiary of GSO. The Fund’s primary investment objective is to seek high current income, with a secondary objective to seek preservation of capital, consistent with its primary goal of high current income. There can be no assurance the Fund will achieve its investment objectives. Additional information is available at www.blackstone-gso.com/bgb-index.php.
About The Blackstone Group and GSO Capital Partners
Blackstone is one of the world’s leading investment and advisory firms. We seek to create positive economic impact and long-term value for our investors, the companies we invest in, the companies we advise and the broader global economy. We do this through the commitment of our extraordinary people and flexible capital. Our credit business, GSO, with approximately $54.6 billion of assets under management as of September 30, 2012, is one of the largest credit-oriented alternative asset managers in the world and a major participant in leveraged finance. GSO specializes in collateralized loan obligation vehicles (CLOs) and credit-oriented funds, which include leveraged loans, special situations, mezzanine, distressed, secondary market and rescue financing credit strategies. Our other alternative asset management businesses include the management of private equity funds, real estate funds, funds of hedge funds, and closed-end mutual funds. Blackstone also provides various financial advisory services, including mergers and acquisitions advisory, restructuring and reorganization advisory and fund placement services.
Further information is available at www.blackstone.com. Follow us on Twitter @Blackstone.
Blackstone / GSO Strategic Credit Fund is a closed-end fund and closed-end funds do not continuously issue shares for sale as open-end mutual funds do. Since its initial public offering, the Fund has traded on the New York Stock Exchange under the symbol BGB. Investors wishing to buy or sell shares need to place orders through an intermediary or broker.
Contact the Fund at 1-877-299-1588 or visit the Fund’s website at www.blackstone-gso.com/bgb-index.php for additional information.