London-headquartered 3i Debt Management (3iDM), the credit arm of investment manager 3i Group, has closed its latest CLO Harvest IX at €525 million, making it the largest European CLO of 2014, as announced in a statement.
It is also the first loan-only Volcker compliant CLO issued in Europe, the firm said.
The Volcker Rule prohibits banks from having an ownership interest in CLOs backed by anything but loans and is due to come into effect in July 2017.
3i DM has now raised two European CLOs this year, along with two US CLOs, amounting to €1.7 billion ($2.3 billion).
Four classes of investment grade debt amounting to €419.5 million were issued in Harvest IX, along with €105.5 million in non-investment grade mezzanine and subordinated notes.
The €304.2 million Class A are rated AAA/Aaa by S&P and Moody’s and pay Euribor plus 1.35 percent; the €60.8 million Class B notes are rated AA/Aa2 paying E+1.90 percent; the €30.4 million Class C notes are rated A/A2 paying E+2.40 percent; the €24.1 million Class D notes rated BBB/Baa2 pay E+3.00 percent; the €35.5 million Class E notes rated BB/Ba2 pay E+4.50 percent and the €15 million Class F notes rated B-/B2 pay E+5.25 percent. There is also a €55 million subordinate tranche.
Jeremy Ghose (pictured), managing partner and chief executive of 3iDM, said: “We have now successfully closed eight CLOs raising c. €3.1bn in just over twenty months, and in 2014 alone we have raised over €1.7 billion through four CLOs. These achievements demonstrate the significant investor appetite and confidence in our platform.”
Harvest IX will principally focus on investing in European senior secured loans backing private equity buyouts in Europe via the CLO. It has a 14-year investment period and a non-call period of 2 years. The final maturity is August 2028.
Last month, the New York arm of 3iDM closed a $618 million US CLO called Jamestown IV. That followed the close of the $416 million COA Summit US CLO and the €425 million Harvest VIII European CLO, in March this year.