9th Nov 2015 09:49
LONDON (Alliance News) - Fair Oaks Income Fund Ltd on Monday said that the master fund into which it invests has agreed to acquire USD25.0 million notional of equity notes, representing 78% of the total equity of a new collateralized loan obligation backed by a portfolio of US broadly syndicated, secured loans.
The instrument is named the AIMCO CLO Series 2015-A LLC. Its portfolio is managed by AIMCO, a subsidiary of Allstate Corp, a listed, US-based multi-line insurance group with more than USD83.00 billion worth of investment assets at the end of June.
"This CLO's current target portfolio has a principal value of USD500 million across an expected 200 unique bank loan issuers, with an expected weighted average exposure per issuer of approximately 0.57%," Fair Oaks Income Fund said.
The general partner of the Fair Oaks Income Fund LP master fund has estimated the potential total return for the investment at between 15% and 17% per annum.
"After this investment, and a USD4 million secondary purchase of Neuberger Berman XIX equity, the directors consider that the proceeds raised in August have now been fully committed. The market volatility experienced in September, after the issuance of C shares, has provided the master fund with a transaction pipeline which has resulted in an effective deployment of capital ahead of original expectations, and which the general partner believes continues to offer attractive investment opportunities for the master fund," Fair Oaks Income Fund said.
Ordinary shares in Fair Oaks Income Fund were untraded early on Monday at USD0.958 per share.
By Samuel Agini; [email protected]; @samuelagini
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