Buoyant market relying on robust expertise
Professional investors are seeking solutions that combine yield and credit risk management, and are revisiting these investment vehicles.
CRD IV regulation, which came into effect in July 2013, has limited availability of CLOs on the market as a result of rules on the alignment of interests, entailing hefty capital requirements and thereby creating a real challenge for investment managers. Natixis’ experts at both Corporate & Investment Banking and Natixis Asset Management worked closely together to address these challenges. Natixis Asset Management benefits from more than 15 years’ expertise in corporate debt securitisation and is well renowned on this asset class. Teams at Corporate & Investment Banking who managed the structuring and placement of the bonds issued by the CLO have 13 years’ experience on this market.
Diversified portfolio and high-quality management
The Purple Finance CLO1 portfolio is diversified across various business sectors and geographies and consists of around one hundred corporate debt obligations. At least 95% of the portfolio will be made up of first lien senior loans at any given time, while a maximum of 5% of the portfolio can be invested in subordinated loans and/or in bonds. Purple Finance CLO1 is managed by Natixis Asset Management’s corporate private debt team, which is in charge of a range of individual mandates, funds and CLOs with total assets of close to one billion euros (as at November 30, 2017).
Deputy Chief Executive Officer of Natixis Asset Management, in charge of Fixed Income and Equities Ibrahima Kobar notes: "Natixis Asset Management has been managing structured debt to serve its clients for more than 15 years. We have the necessary set-up required to meet the range of regulatory requirements involved in CLO 2.0 and a group of highly skilled specialists well equipped to structure, assess risk and select the appropriate loans. We aim to launch one CLO each year, market conditions permitting, and are also carefully considering the US market with a view to pursuing our international expansion."
Emmanuel Issanchou, Head of Global Structured Credit & Solutions at Natixis’ Corporate & Investment Banking arm, notes: “Most of the Purple Finance CLO 1 tranches were oversubscribed. The CLO securitisation format enables sophisticated investors to carefully steer their risk/return balance as a result of the various tranches on offer and benefit from a diversified risk profile, while also enjoying a yield premium as compared to the underlying loans. Natixis is extremely active on this market, with 18 deals arranged in 2017.”
1 Purple Finance CLO 1 is a securitization vehicle governed by Irish law. It is managed by Natixis Asset Management which is a French asset manager authorised by the Autorité des Marchés Financiers (authorisation No. GP90009). Purple Finance CLO 1 is closed to new investors.
2 Source: Natixis
A subsidiary of Natixis Investment Managers
Limited liability company
Share capital €50,434,604.76
Regulated by the Autorité des Marchés Financiers (AMF) under no. GP 90-009
RCS Paris n°329 450 738
21 quai d’Austerlitz 75634 Paris Cedex 13
Natixis Investment Managers
RCS Paris 453 952 681
Share Capital: €178 251 690
21 quai d’Austerlitz, 75013 Paris
Limited liability company
Capital € 5 019 776 380,80
RCS Paris n°542 044 524
Regulated in France by the ACPR - Autorité de Contrôle Prudentiel et de Résolution
30, avenue Pierre Mendès-France
This communication is for information only and is intended for investment service providers or other Professional Clients. The analyses and opinions referenced herein represent the subjective views of the author as referenced unless stated otherwise and are subject to change. There can be no assurance that developments will transpire as may be forecasted in this material.