LONDON (Alliance News) - Chenavari Capital Solutions Ltd Wednesday said it has invested EUR21.6 million, out of a total transaction size of EUR79 million, in a bilateral transaction giving exposure to a concentrated portfolio of sub-performing and non-performing mortgage loans and repossessed real estate assets.
In a statement, Chenavari Capital Solutions, which invests in a variety of financial instruments, and whose assets span mortgages, SME and trade finance loans, as well as commercial mortgages, said the original face value of the portfolio is about EUR400 million.
Chenavari Capital Solutions said the seller of the assets is a Spanish bank that wants to deleverage its balance sheet and improve its regulatory capital position.
Banks have been deleveraging in order to meet regulators' capital requirements in the wake of the financial crisis.
According to Chenavari Capital Solutions, the portfolio is predominantly made up of loans backed by residential and commercial real estate assets and, to a lesser extent, repossessed real estate assets ready for sale and mortgage loans that had been granted to local developers. All assets in the portfolio are located in Spain, Chenavari Capital Solutions added.
"The transaction will be funded by way of subscription by [Chenavari Capital Solutions] of pass-through certificates issued by the acquiring SPV [special purpose vehicle] which will pay the net cash flows received by the SPV. The servicer with whom the investment advisor partnered to manage the portfolio is co-investing EUR5 million to ensure a strong alignment of interests," Chenavari Capital Solutions said.
The transaction will represent about 13% of Chenavari Capital Solutions' net asset value. The company will be about 87% invested following the transaction, based on its net asset value at the end of August.
Chenavari Capital Solutions shares were Wednesday untraded at 106.50 pence.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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