Debut manager prices first ever CLO featuring ESG criteria

01 March,2018 - 05:00 pm UTC

Author(s): by Hugh Minch
The CLO market has welcomed a new manager. Permira Debt Managers launched its debut 2.0 transaction via Bank of America Merrill Lynch, according to market sources, pricing a €362.5 million deal yesterday named Providus CLO I, which is expected to close on 11 April.
Providus CLO I is believed to be the first CLO issued with ESG (environmental, social and governance) eligibility criteria written into its documentation. Sources say the CLO will be restricted from investing in specified industries, such as tobacco and gambling.
Ariadna Stefanescu is the new CLO's portfolio manager and Thomas Kyriakoudis is chief investment officer. Kyriakoudis has previously flagged his interest in ESG considerations. Speaking on a panel Creditflux's Direct Lending conference last month, he said of a fictional loan: "We wouldn't do it for ESG reasons. It would be very clear for us that we wouldn't do anything like this".
Providus CLO I features €323.75 million debt liabilities that are funding €38.75 million equity. The triple A notes priced at par, paying 74 basis points over Euribor, which is just 6bp shy of the record tight set by Ares last week, and matches the spread of GSO Partners’ latest deal, Marlay Park CLO.
Permira Debt Managers was established in 2007 and has provided more than €4.5 billion of capital to over 100 European businesses, according to a press release. The manager relaunched its CLO platform last year (see PDM hands euro CLO mandate to bank after hiring three loan specialists). The name Providus is a Latin word meaning thoughtful or farsighted, according to a spokesperson from Permira.
Providus CLO I
Permira Debt Managers
Euro new
€362.5 million
Reinvestment date
14 May 2022
Non-call date
14 May 2020
Risk retention
EU, Foreign Safe Harbour
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