Sector developments and company hires

Carlyle is set to acquire from CBAM Partners a portfolio of assets using a combination of US$615m in cash from Carlyle’s balance sheet and approximately 4.2 million newly issued common shares. CBAM’s US$15bn in assets under management - the majority of which are in CLO funds - will be integrated into Carlyle’s global credit platform. The transaction will increase Carlyle’s CLO AUM to approximately US$48bn, making it the world’s largest CLO manager.

Carlyle is also acquiring certain other CBAM assets across private credit that fit strategically into its global credit platform. The transaction will have an immediate and accretive impact to fee related earnings and distributable earnings per common share. This acquisition is expected to close in 1H22 and is conditioned upon the satisfaction of certain customary closing conditions.

In other news…

EMEA
Ardian has launched a new real estate debt business as it works to strengthen its operations in Europe. Arnaud Chaléac will lead the new business as head of Ardian Real Assets Debt, having been with the firm for 14 years building expertise in structured finance, and serving as co-head of group finance.

Chaléac will develop the new platform with assistance from md Sandrine Amsili, who brings more than 17 years of real estate debt expertise, including helping establish SCOR Investment Partners’ platform in the role of director. The new business will seek finance for European real estate projects alongside banks and will focus on senior debt.

Lev loan cap warning
The European Leveraged Finance Association (ELFA) has published a report warning against the use of voting cap provisions, following the first instance of aggressive voting cap language appearing in a European leveraged loan, as part of a Dutch chemical distributor’s recent buyout financing. Sabrina Fox, ceo, ELFA, comments: “Voting cap provisions severely undermine the notion of equal contractual rights and pro-rata principles for creditors. Such manoeuvres undermine the powers creditors are entitled to by virtue of their superior position within a borrower’s capital structure.”

She continues: “It is ELFA’s view that any increase in the prevalence of voting cap provisions will serve to lessen the appeal of investing in European leveraged credit markets, while lowering the valuations of distressed credit in secondary markets. This divide-and-conquer treatment of creditors seems even more egregious when factoring in the presence of additional clauses that exclude ‘net short lenders’ when calculating consent thresholds. Our aim is to make investors aware of the risks inherent in these provisions, so they can consider its inclusion in future deals.”

North America
Dechert has expanded its global finance practice with the hire of new partner Edward ‘Jay’ Southgate. With extensive experience in capital markets, Southgate joins the firm in New York from Morgan, Lewis and Bockius, and will serve as an asset finance and securitisation partner.