Loan Note: Arena makes push in transport sector; Carlyle launches carbon-linked loans

Arena Investors teams up with Mobility Capital for transport lending. Plus: Carlyle launches decarbonisation loans; and NPL Markets looks to enhance South America's ecosystem. Here's today's brief for our valued subscribers only.

They said it

“Fed’s [James] Bullard, admittedly known as a hawkish member of the Federal Open Market Committee, and other Fed officials, reminded the investment community on Tuesday that they are determined to fight current high inflation”

Dario Messi, fixed income research at Julius Baer, comments on the latest developments in US Treasury yields

First look

Arena Investors: New joint venture will supply transformative capital for the transport sector (Source: Getty)

Arena teams up with Mobility for transport finance
Arena Investors has agreed a joint venture with Mobility Capital Group to invest in the transportation and logistics sectors.

The strategic partnership between the two firms will have an initial capacity to invest up to $200 million in non-equity investments. It will enhance Arena’s presence in growth-orientated transportation and logistics, while providing Mobility Capital with strategic and financial support to make large-scale investments around the world.

Hooman Yazhari, founder and executive chairman of Mobility Capital, said: “We are at the dawn of a transportation technology super-cycle, with the world’s carbon-based transportation fleets and infrastructure facing obsolescence and replacement. Our vision is to deploy impactful capital to develop more sustainable, resilient, and inclusive transportation ecosystems around the world.”

Mobility’s mandate allows it to provide a range of capital solutions for customers including traditional loans and lease transactions to highly structured investments, buildouts and fleet and infrastructure joint ventures.

Carlyle launches decarbonisation loans
Carlyle, one of the world’s biggest private markets investors, has launched a decarbonisation-linked financing programme through its credit platform.

The programme will provide incentives for borrowers to reduce greenhouse gas emissions and achieve other climate-related targets. Carlyle claims it is one of the first decarbonisation programmes available in the US private credit market.

Borrowers will see pricing benefits tied to surpassing decarbonisation targets and other climate-related KPIs. Carlyle will work with its borrowers to assess and monitor KPIs, and its ESG team will provide ongoing support to assist firms in achieving these goals.

Mark Jenkins, head of global credit at Carlyle, said: “We believe that strong ESG competencies are a hallmark of management excellence, and that successful decarbonisation requires meaningful engagement between investors and businesses. Through this programme, we seek to drive value by helping borrowers improve their competitive positioning, while building on Carlyle’s long history of ESG integration.”

The firm recently made its first two debt financings with decarbonisation-linked terms. It supported Morgan Stanley Capital Partners’ buyout of Fairway Lawns and the refinancing of American Industrial Partners’ portfolio company The Carlstar Group. Both deals contained pricing reductions relating to reducing greenhouse gas footprints and other ESG KPIs.


NPL Markets collaborates in South America
Specialist NPL data and research provider NPL Markets has announced a collaboration with the International Finance Corporation to create a more efficient marketplace in South America.

The deal with the IFC, which is part of the World Bank Group, will focus initially on Brazil and Mexico, the region’s largest markets. NPL Markets will offer clients in the region data preparation for NPL portfolios, valuation, analytics and data and portfolio and regulatory reporting, among other services.

Its research into the market has found that increasing inflation can materially impact default risk. In Mexico, NPLs increased 30 percent between Q4 2021 and Q1 2022. In Brazil, NPLs are expected to rise by 50 percent over the next two years.

Gianluca Savelli, CEO of NPL Markets, said: “Providing a more efficient mechanism to sell and value illiquid loans will be crucial to help banks and institutional clients to better manage their credit exposures.”

SVPGlobal expands aviation team
Strategic Value Partners has made three senior hires to its aviation team. John Morabito has joined as a managing director and will lead SVPGlobal’s day-to-day aviation investing activities. He has more than 20 years of aviation experience.

Morabito, whose work at CIT Group from 2001 to 2017 included serving on the senior leadership team of CIT Aerospace, was most recently senior managing director and portfolio manager at a commercial aviation-focused relative value fund.

Ben Pughe-Morgan and Matthew Eddy, two aviation industry veterans with more than 30 years’ combined experience, also joined as members of the investment team and as operating partners focused on aviation. Pughe-Morgan headed origination for the Deucalion Aviation Funds, the in-house leasing arm at DVB Bank SE, from 2001 to 2019. Prior to joining SVPGLobal, Eddy held various roles at CIT Bank and CIT Aerospace.

Victor Khosla, founder and chief investment officer of SVPGlobal, said the firm has worked very hard to become a leader in the aviation market, and that the three new hires would help position it even more favourably to identify new opportunities.

SVPGlobal, which has more than $18 billion of assets under management, recently announced it had acquired full ownership of Deucalion Aviation Ltd, after owning 50 percent of the global aviation platform since June 2021.

LP watch

Institution: Maine Public Employees Retirement System Headquarters: Augusta, USAUM: $18.8 billionAllocation to alternatives: 40.8%

Maine Public Employees Retirement System approved a $125 million commitment to AG Direct Lending Fund V, a contact at the pension informed Private Debt InvestorThe commitment is subject to final due diligence by the pension fund.

The vehicle, managed by Angelo Gordon, will invest in North American companies and seek senior debt returns.

The US public pension’s recent fund commitments have predominantly targeted North American vehicles focused on a variety of sectors.

Today’s letter was prepared by Andy Thomson with John Bakie and Robin Blumenthal