Bank of Ireland’s acquisition finance team launched a €410 million collateralised debt obligation (CDO) of mainly European leveraged loans on September 19th. This is BOI’s first such CDO, and will close on October 6th.
The CDO was made up of 90 per cent senior loans, and 10 per cent mezzanine loans. JP Morgan acted as bookrunner, and Martina McMahon, associate director in BOI’s acquisition finance team, says that the deal priced well within the range of recent transactions, with the AAA tranche pricing at 61, the AA at 105, and the BBB at 325. The targeted return for investors is 15 per cent.
According to Tom Hayes, head of acquisition finance at BOI, the transaction was oversubscribed, and was increased from euro 350 million to euro 410 million, due to strong investor demand. Investors came from the UK, Europe, US, Far East, New Zealand and Dublin’s IFSC.
The deal is the first in a series of CDOs for BOI and Hayes expects that they will be back in the market within 12 months, with an issue of a similar size.
BOI’s acquisition finance team has been investing in leveraged loans for 10 years and specialises in providing sub-investment grade senior and mezzanine loans to finance leveraged buyouts. At present, the team, which consists of 40 people based in Dublin, London and the US, has euro 2.2 billion of assets under management, and has gone into over 200 loans. Its main markets are in France, Germany, Ireland, the UK and the US.
Last month AIB Acquisition Finance closed its third CDO of leveraged loans, the euro 407 million Galway Bay BV transaction. |
