Blackstone Group LP (BX), the world’s biggest buyout firm, raised as much as $960 million for its third closed-end fund investing in non-investment grade corporate debt.

The Blackstone/GSO Strategic Credit Fund pooled $834.8 million in an initial public offering and may be increased to as much as $960 million if the underwriters exercise an option to buy additional shares, according to a statement distributed today by Business Wire.

GSO Capital Partners LP, the credit-investment arm of New York-based Blackstone, is a “strong believer in the long-term opportunity in below-investment grade corporate credit,” Dan Smith, a senior managing director at Blackstone, said in the statement.

Morgan Stanley, Citigroup Inc., Bank of America Corp., UBS AG and Wells Fargo & Co. are the lead underwriters of the closed-end fund, which began trading today on the New York Stock Exchange under the ticker BGB. (BGB)

Earlier this month, Deutsche Bank AG raised a $563.9 million collateralized loan obligation for GSO, according to data compiled by Bloomberg.

CLOs are a type of collateralized debt obligation that pool high-yield, high-risk loans and slice them into securities of varying risk and return.

To contact the reporter on this story: Christine Idzelis in New York at cidzelis@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net