3iDM closes debut European CLO

The firm’s first European CLO closed on €310m. 

3i Debt Management closed its debut European collateralised loan obligation on €310 million, according to a statement released by the firm Thursday. Natixis and Resource Capital Markets acted as co-arrangers on the vehicle.

Harvest VII will invest in in senior secured loans backing private equity buyouts in Europe. The fund is comprised of €268 million across five classes of investment grade debt as well as €42 million in subordinated notes, according to a statement.

Harvest VII features a €177 million Class A tranche paying Euribor +135 bps, which it rated as AAA; a €34 million Class B tranche paying Euribor +175 bps and rated AA+ ; a €20 million Class C tranche paying +280 bps and rated A; a €13.6 million Class D tranche paying +370 bps and rated BBB; a €23.6 million Class E tranche paying 550 bps and rated BB; and a subordinated tranche of €42 million. 3i Group committed to take a minority stake in the subordinated notes.

The fund has a four year investment period of four years and a non-call period of two years. The vehicle will have a final maturity of October 2025, according to the release.

3iDM has already closed two US CLOs totaling $950 million since its formation in 2011. The firm has £6.7 billion in total assets under management.

“We continue to demonstrate the strength of our platform and our capabilities to successfully launch and close new funds,” said managing partner Jeremy Ghose in a statement. “One of our priorities remains to strengthen our position as a leading global manager of senior loans through further launches of CLOs in the US and Europe.”

The European CLO market has finally started to reemerge after years of inactivity caused by the financial crisis. As of August, 10 European CLOs had priced bringing total issuance to €3.4 billion. 

“As long as the primary loan market in Europe remains active, we think that European CLO issuance will continue albeit confined to a smaller number of scale players given the risk retention requirements in Europe,” a 3iDM spokesperson told Private Debt Investor.