26 Jun 2015 07:00
26 June 2015
Chenavari Capital Solutions Limited
Primary investment
Chenavari Capital Solutions Limited (the "Company") announces a new primary transaction (the "Transaction").
Primary transaction
The Company has today invested €4.5mn, out of a total transaction size of €40.45mn, in a first-loss exposure to a diversified portfolio of SME loans extended by a large Italian corporate and investment bank (the "Bank"). The loan portfolio is highly granular and is primarily located in Northern Italy. The portfolio is static, and the amortising nature of the loans causes the first-loss risk to de-lever over time.
The purpose of the Transaction is to manage risk weighted assets and optimise capital of the Bank, and the Transaction will furthermore bring economic capital benefits to the Bank. The Transaction is the second in a series from the Bank, and forms an important strategic cornerstone of the Bank's capital management strategy.
Chenavari Credit Partners LLP, the investment advisor to the Company, has carefully assessed the full through-the-cycle default and recovery histories for the loan book, as well as fully examining the robustness of the underwriting, monitoring and recovery processes. This investment will benefit from the Bank's solid underwriting processes and strong local presence in the Italian market, as well as a comprehensive set of work-out strategies employed by the Bank.
The Company has direct credit exposure to the issuing Bank as the proceeds of the transaction stand on deposit with the Bank. This exposure will be subject to an on-going hedging strategy.
Upon acquisition, the Transaction represents approximately 2.5% of the Company's net asset value. Following the above Transaction, the Company is now approximately 97% invested (based on the Company's net asset value as at May month end 2015).
Enquiries:
Chenavari Credit Partners LLP
Email: Investor-relations@chenavari.com
Telephone: +44 20 7259 3600