Hayfin Emerald CLO I: 07 September 2018
The assets securing the notes will consist of a portfolio of primarily Senior Obligations, Mezzanine Obligations and High Yield Bonds, and will be managed by Hayfin Emerald Management LLP.
Hayfin Capital Management LLP is a private credit alternative asset manager with approximately €9.6 billion in assets under management as at 31 March 2018. The firm is headquartered in London. In January 2017, British Columbia Investment Management (BCI) acquired the majority institutional shareholding in Hayfin Capital Management LLP to support the long-term growth plan of the company. BCI is a provider of investment management services for British Columbia’s public sector with approximately C$136 billion of managed assets.
Eligibility criteria (includes): it is a Secured Senior Obligation, a Corporate Rescue Loan, an Unsecured Senior Obligation, a Mezzanine Obligation, a Second Lien Loan or a High Yield Bond (in each case, which is not a sub-participation of a sub-participation); it is not a Defaulted Obligation or a Credit Risk Obligation; it is not a lease; it is not a Structured Finance Security or a Synthetic Security; it is not a Zero Coupon Security or Step-Up Coupon Security; other than in the case of a Corporate Rescue Loan, it has an Fitch Rating of not lower than “CCC-” and a Moody’s Rating of not lower than “Caa3”; is an obligation of an Obligor or Obligors Domiciled in a Non-Emerging Market Country (as determined by the Collateral Manager acting on behalf of the Issuer); it is not a Project Finance Loan; it has a minimum purchase price of 60.0 per cent of the Principal Balance.
The Issuer anticipates that, by the Issue Date, it will have purchased or committed to purchase Collateral Obligations, the Aggregate Principal Balance of which is equal to at least €350,000,000 which is approximately 87.5% of the Target Par Amount.
EU Risk Retention: Hayfin Emerald Management LLP shall act as the Retention Holder for the purposes of the EU Retention Requirements. On the Issue Date the Retention Holder will undertake to subscribe for and retain a material net economic interest in the first loss tranche of not less than 5% of the securitised exposures by subscribing for and holding, on an ongoing basis, and for so long as any Notes are outstanding, Subordinated Notes with a Principal Amount Outstanding equal to not less than 5%.
US Risk Retention: In the LSTA Decision, the Panel held that collateral managers of “open market CLOs” are not “securitisers” or “sponsors” under Section 941 of the Dodd-Frank Act and, therefore, are not subject to risk retention and do not have to comply with the U.S. Risk Retention Rules. However, it is currently uncertain as to whether this transaction will constitute an "open-market CLO" as described in the LSTA Decision.