15 Sep 2014 08:30
Chenavari Capital Solutions Limited (the "Company")
Primary investment
The Company announces its fourth primary transaction.
Primary transaction
The Company has today invested approximately £4m in a very thick first-loss bilateral transaction referencing a book of leveraged loans financed by a bank ("the Bank"). The portfolio primarily provides exposure to European and UK corporates with ratings higher than B-. The portfolio is diversified with maximum concentration of 2.5% by group of borrowers.
While taking the first loss risk, the investment is very resilient given the thickness of the tranche of about 20%. The transaction was made possible thanks to a proprietary structure designed by the Investment Advisor achieving the required regulatory capital treatment.
The Company is not exposed to the counterparty risk of the Bank. While the expected duration of the investment is shorter than usual, this is compensated by an attractive base case IRR.
Upon acquisition, the transaction represents approximately 3% of the Company's net asset value.
Following the above transaction the Company is now approximately 74% invested (based on the Company's net asset value as at July month end 2014).
A further investment is in documentation phase and is expected to close by the end of September for approximately £15m equivalent.
The Investment Adviser continues to work on a pipeline of transactions with multiple deals being analysed with attractive risk-adjusted returns.
Enquiries:
Kirstie McLaren
Chenavari Investment Managers
Email: Investor-relations@chenavari.com
Telephone: +44 20 7259 3600