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Wednesday, 17th April 2024
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Securitisation update: Ireland is a top centre for CLO management Back  
WWith 10 collateralised loan obligations (CLOs) outstanding, from a host of managers including AIB, Avoca Capital, Bank of Ireland and Harbourmaster Capital, Ireland has become the second largest location for the management of CLOs globally, ahead of France and the US.

Over €4 billion in CLO deals are now managed in Ireland by these four institutions, with DEPFA recently joining the fray in November with its ?391.7 million UK Private Finance Initiative (PFI) CLO. This is the first time such assets have been securitised in this way, and is expected to provide an important precedent for a growing market. The transaction was intermediated by KfW Foerderbank, the German promotional bank, and involved 24 loans made by DEPFA to finance UK Private Finance Initiative (PFI) projects across a number of sectors of public infrastructure including schools, hospitals, roads, police stations, court buildings and other public offices.

Last September, Bank of Ireland’s acquisition finance team launched its first CLO, a €410 million deal, Partholon CDO 1 plc, of mainly European leveraged loans. The division’s second deal, Partholon II, is expected to come to the market shortly. 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. The team, which consists of 40 people based in Dublin, London and the US, has €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.

AIB’s acquisition finance team has transacted three CLO’s to date – the €407 million Galway Bay deal in 2003, the €364 million Clare Island deal in 2002, and the €407 million Tara Hill deal in 2001. Avoca has just launched its second CLO, the €367 million Avoca CLO II B.V., while Harboumaster has just completed its fourth, the €510 million Harbourmaster CLO 4 B.V.

Almost all of the CLOs managed to date out of Dublin are set up as Dutch Bvs, with the exception of BOI’s Partholon deal, but changes in the Finance Act 2003, may make it easier for other CLO deals to use Irish special purpose vehicles.

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