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19 Feb 2015 11:30
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19 February 2015
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Chenavari Capital Solutions Limited (the "Company")
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Primary Investment
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The Company announces its seventh primary investment.
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Primary transaction
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The Company has today invested Β£5.1 million, representing part of the subordinated interest in a bilateral transaction that provides exposure to a portfolio of prime UK residential mortgage loans. The total original principal outstanding of the portfolio is ca. Β£150 million.
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The rationale of the transaction for the selling bank is to dispose of a non-core asset and assist its deleveraging process.
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The portfolio comprises prime and buy-to-let mortgage loans backed by residential properties located primarily in central London. The borrowers are affluent or high net worth and the mortgage loans are characterised by a low weighted average current loan-to-value and minimal arrears.
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The Investment Advisor has re-underwritten the portfolio and priced the investment to a strong double digit return with robust downside protection. The transaction benefits from attractive limited recourse bank financing that allows us to monetize the purchase price discount over a short period of time as well as receive excess spread.
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The transaction will be funded by way of subscription by the Company of instruments issued by the acquiring SPV which will pay the net cash flows received by the SPV.
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The servicing of the portfolio will be transferred to the Investment Advisor's chosen partner-servicer in the UK for residential mortgages, with whom it has an existing and long-standing relationship.
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Upon acquisition, the transaction represents approximately 4% of the Company's net asset value. Following the above transaction the Company is now approximately 80% invested (based on the Company's net asset value as at 31 December 2014).
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Enquiries:
Kirstie McLaren
Chenavari Investment Managers
Email: Investor-relations@chenavari.com
Telephone: +44 20 7259 3600
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