6 Jan 2016 07:00
6 January 2016
Chenavari Capital Solutions Limited
Primary Investment
Chenavari Capital Solutions Limited (the "Company") has invested €4mn in junior instruments in a short term loan warehousing transaction backed by a portfolio of leveraged corporate loans. Senior finance was provided by a leading global bank and financial services firm (the Bank).
The portfolio provides exposure to primarily European and UK corporates with ratings at or higher than B-. The portfolio is diversified with an expected maximum concentration of 4% by group of borrowers. The junior instruments represent first loss risk and the Company expects the thickness of the tranche (approximately 20%) to provide a resilient feature.
Upon acquisition, the transaction represented approximately 3% of the Company's net asset value. Following the above transaction and other cash flows the Company is now approximately 94% invested.
The expected return of the investment is in excess of Company's target gross return1. Chenavari Investment Managers, the Investment Advisor of the Company, continues to work on a pipeline of originated transactions with attractive risk-adjusted returns.
1 Hypothetical performance forecasts have many inherent limitations, some of which are described below. No representation is being made that the investment or the Company will or is likely to achieve profits similar to those shown. In fact, there are frequently sharp differences between hypothetical performance forecasts and the actual results subsequently achieved by any particular investment. One of the limitations of hypothetical performance forecasts is that they are generally prepared with the benefit of hindsight and do not involve financial risk in actual trading. The achievement of hypothetical performance forecasts can be affected by changes in specific trading programs, economic conditions, foreign exchange rates, interest rates and/or credit spreads, impairments, and other external factors, including those resulting from war, incidents of terrorism or responses to such events.
About CCSL
Chenavari Capital Solutions Limited, incorporated in Guernsey, is a closed-ended investment company admitted to trading on the specialist fund market of the London Stock Exchange on 7 October 2013. The Investment Objective of the Company is to provide Shareholders with an attractive return, while limiting downside risk, through investment in Bank Capital Solutions Transactions primarily with UK and European banks. Bank Capital Solutions Transactions are transactions designed to allow banks to reduce their risk-weighted assets on portfolios of assets, or otherwise optimise the capital required to be held against such exposures. The Company seeks to exploit opportunities arising from the increased regulatory capital requirements for European banks under the Basel III framework. The strategy allows banks to reduce the regulatory capital required to be held against specific portfolios of assets.
Forward-looking statements
This announcement contains forward-looking statements including, without limitation, statements containing the words "believes", "estimates", "anticipates", "expects", "intends", "may", "will", "target" or "should" or, in each case, their negative or other variation or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, financial condition, performance or achievement of the Company or any Originator, or industry results, to be materially different from future results, financial condition, performance or achievements expressed or implied by such forward-looking statements. Past performance is not a reliable indicator of future performance and the Company may not achieve the same level of returns as those achieved by previous investments. Target returns are estimated only and net of fees, expenses and income reinvested. They are based on long-term performance projections of the investment strategy and market conditions at the time of modelling and therefore, subject to change. There is no guarantee that any target returns can be achieved. Investors should not place reliance on such target returns in deciding whether to invest in the Company.
About Chenavari
Chenavari Investment Managers is the trading name of Chenavari Credit Partners LLP and is part of the Chenavari Financial Group, a specialist alternative asset management group focusing on European & Asian markets. With over 100 professionals and USD5.4 billion of assets under management2, funds managed by Chenavari target investment strategies across Credit (Corporate and High yield, Financials, Credit Derivatives), Structured Finance (ABS, CMBS, Regulatory Capital) and Illiquid Opportunities (Private Debt, Real Estate, Consumer Finance, Private Equity). The Chenavari group contains entities authorized and regulated by several regulators globally, including the UK FCA, the Luxembourg CSSF, the US SEC, the US CFTC and the Hong Kong SFC. (www.chenavari.com)
2 Includes committed but undrawn capital of approximately US$200mn, full amount available with 7 days' notice, payable within 10 business days after notice
Enquiries:
Kirstie McLaren
Chenavari Investment Managers
Email: clir@chenavari.com
Telephone: +44 20 7259 3600
Robert Peel
Dexion Capital plc
Telephone: +44 20 7832 0900
IMPORTANT INFORMATION
This document has been issued by Chenavari Capital Solutions Limited, and should not be taken as an inducement to engage in any investment activity and is for the purpose of providing information about the Company. This document does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any share in the Company or securities in any other entity, in any jurisdiction, including the United States, Canada, Japan, South Africa nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction.
This document, and the information contained therein, is not for viewing, release, distribution or publication in or into the United States, Canada, Japan, South Africa or any other jurisdiction where applicable laws prohibit its release, distribution or publication, and will not be made available to any national, resident or citizen of the United States, Canada, Japan or South Africa. The distribution of this document in other jurisdictions may be restricted by law and persons into whose possession this document comes must inform themselves about, and observe, any such restrictions. Any failure to comply with the restrictions may constitute a violation of the federal securities law of the United States and the laws of other jurisdictions.
The shares issued and to be issued by the Company (the "Shares") have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States. The Shares may not be offered, sold, resold, pledged, delivered, distributed or otherwise transferred, directly or indirectly, into or within the United States, or to, or for the account or benefit of, US persons (as defined in Regulation S under the Securities Act). No public offering of the Shares is being made in the United States.
The Company has not been and will not be registered under the US Investment Company Act of 1940, as amended (the "Investment Company Act") and, as such, holders of the Shares will not be entitled to the benefits of the Investment Company Act. No offer, sale, resale, pledge, delivery, distribution or transfer of the Shares may be made except under circumstances that will not result in the Company being required to register as an investment company under the Investment Company Act. Neither the U.S. Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved of the Shares or passed upon or endorsed the merits of the offering of the Shares or the adequacy or accuracy of the Company's prospectus. Any representation to the contrary is a criminal offence in the United States. In addition, the Shares are subject to restrictions on transferability and resale in certain jurisdictions and may not be transferred or resold except as permitted under applicable securities laws and regulations. Investors may be required to bear the financial risks of their investment in the Shares for an indefinite period of time. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdictions.
No liability whatsoever (whether in negligence or otherwise) arising directly or indirectly from the use of this document is accepted and no representation, warranty or undertaking, express or implied, is or will be made by the Company, or any of their respective directors, officers, employees, advisers, representatives or other agents ("Agents") for any information or any of the opinions contained herein or for any errors, omissions or misstatements. None of the Agents makes or has been authorised to make any representation or warranties (express or implied) in relation to the Company or as to the truth, accuracy or completeness of this document, or any other written or oral statement provided. In particular, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on any, targets, estimates or forecasts contained in this document and nothing in this document is or should be relied on as a promise or representation as to the future.
Unless otherwise indicated, the information provided herein is based on matters as they exist as of the date of preparation and not as of any future date.
All investments are subject to risk, including the loss of the principal amount invested. Past performance is no guarantee of future returns. All investments to be held by the Company involve a substantial degree of risk, including the risk of total loss. The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. You should always seek expert legal, financial, tax and other professional advice before making any investment decision.