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28 Sep 2015 14:30
28 September 2015
Chenavari Capital Solutions Limited (the "Company")
Primary Investment
Chenavari Capital Solutions Limited (the "Company") announces a new primary transaction (the "Transaction").
Primary transaction
The Company has invested €4 million in a portfolio of non-performing residential mortgage loans and repossessed real estate assets across Spain. The total portfolio has an outstanding balance of €437m and is being purchased at a significant discount to both the outstanding balance and the revised real estate valuation.
The portfolio is being divested by the Spanish bank that originated the loans for whom the transaction rationale is to clean its balance sheet and reduce the regulatory capital burden of carrying non-performing loans.
The transaction was bilaterally negotiated by the Investment Advisor and the selling bank and the Investment Advisor has conducted extensive due diligence on the transaction including real estate revaluations, data consistency audits and tax structuring advice. This has been conducted with the chosen servicing partner for the transaction as well as other independent advisory firms specialising in Spanish real estate.
The investment has been priced to a double digit return under a base case that is conservative in terms of resolution strategy, house price appreciation and transaction costs, while still achieving a positive return in a scenario at which properties are realised at "fire-sale" valuations. If a more optimistic scenario for the portfolio work-out is applied returns will be in excess of 20%.
Upon acquisition, the transaction represents approximately 2.3% of the Company's net asset value.
Following the above transaction the Company is now approximately 93% invested (based on the Company's net asset value as at August month end 2015).
Enquiries:
Kirstie McLaren
Chenavari Investment Managers
Email: Investor-relations@chenavari.com
Telephone: +44 20 7259 3600
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