BlueBay Asset Management has agreed a deal that will see it collaborate with investment bank Barclays to provide unitranche debt products to UK corporates.
Bluebay’s Direct Lending Fund will provide financing, with Barclays providing other banking services as well as additional capital. The initiative will provide unitranche packages of up to £120 million (€144 million; $196 million), the firms said in a statement.
The pair said there were a number of advantages from a borrower’s perspective when using this solution: a single term loan, at a single rate of interest, with common terms and effectively one lender or counterparty. The loan can be deployed more quickly than a traditional deal involving several banks, they added, it can be tailored to suit a borrower’s specific requirements, and the borrower gains access to the day-to-day banking services of a UK clearer.
In the event of default, Barclays’ component of the financing package would be repaid first, reports suggested, while BlueBay stands to receive a greater cut of the interest payments of the overall loan.
Anthony Fobel, partner and head of private lending strategies at BlueBay, said in the statement: “The BlueBay Direct Lending Fund has successfully provided much needed growth capital to UK-based mid-market businesses and has also worked closely with private equity firms to offer flexible acquisition facilities and solutions for their portfolio companies. By joining forces with Barclays, the fund can now additionally offer financial sponsors and UK businesses a customised solution that combines the flexibility, speed and execution certainty of a private debt fund, with the well-established banking services of a leading UK clearer.”