QuotedData’s morning briefing 28 September 2020

BioPharma Credit leads new $315m loan to Sebela

In QuotedData’s morning briefing 28 September 2020:

  • CVC Credit Partners European Opportunities (CCPE/CCPG) reported interim results to 30 June 2020, with NAV total returns for the Sterling and Euro share classes coming in at (7.95%) and (8.45%), respectively. Chairman, Richard Boléat, had this to say: “Performance of risk assets as a whole since 30 June has been startling. Investors will be aware of the headline performance of US equity indices, and leveraged credit assets have also experienced a strong rally. It is certainly the case that levered issuers have suffered less in terms of performance and balance sheet damage than markets were anticipating during Q2, but much of the credit for the rally in risk assets generally must go to the willingness and ability of developed market central banks to provide stimulus and liquidity under what has become known as the “whatever it takes” model. It is hard to see how central banks might go about meaningfully withdrawing the current levels of stimulus and support without creating “cliff edge” risks for their economies, particularly noting the current acceleration of COVID-19 prevalence in Europe, so our base case is that the status quo will be maintained in the short to medium term, providing ongoing support to credit markets.”
  • BioPharma Credit (BPCR) announced that together with Sarepta Therapeutics, and BioPharma Credit Investments V (Master) LP, it has entered into a first amendment to the loan agreement dated 13 December 2019. Under the original terms of the loan agreement, BPCR agreed to invest up to US$350m (US$175m in the first tranche and up to an additional US$175m by 31 December 2020) and BioPharma-V agreed to invest up to US$150m in parallel with BPCR acting as collateral agent. The amendment increases the aggregate principal amount of Tranche B from US$250m to US$300m. The company’s investment in Tranche B will remain unchanged at US$175m while BioPharma-V will increase its investment by US$50m. BPCR’s US$350m aggregate investment in Sarepta will represent 25% of the company’s portfolio.
  • Life Settlement Assets (LSAA/LSAB) manages portfolios of whole and fractional interests in life settlement policies issued by life insurance companies operating predominantly in the US, reported interim results (to 30 June 2020) for its A and B share classes. The NAV of class A decreased by 4.9% and the NAV of class B decreased by 7.4% over the period both reflecting a lower than anticipated level of maturities. The class A NAV reduction also reflects the distributions made during the period to class A Shareholders and the former holders of D and E class shares. LSAA notes that over the past five years, the life settlement industry has grown both in funds committed to the sector and consumer awareness. A 2020 industry report showed an 11% increase in policies sold in 2019 compared to 2018, while the face amount of life insurance policies sold increased from USD 3.8 billion to USD 4.4 billion in the same period. The company notes that “it is somewhat premature to speculate how the pandemic will impact the life settlement market. As regards the primary market for life insurance policies, there may be an increase in individuals needing to sell policies due to their financial circumstances. Although LSAA does not acquire policies directly from the individual holders, there may be an increase in supply at a time when there is greater competition elsewhere for capital in the financial markets, potentially creating purchasing opportunities for LSAA in the secondary market.”
  • Urban Logistics REIT raised £89.2m from a placing. A total of 64,191,995 shares have been conditionally placed at an issue price of 139 pence per share. The group has also declared a special dividend of 3.25 pence per share in respect of the six months ending 30 September 2020. The special dividend will be paid on 23 October 2020 to shareholders on the register on 9 October 2020.
  • Alcentra European Floating Rate Income has convened an EGM to approve the voluntary liquidation of the fund. If approved, liquidators are forecast to be appointed early in November.

We also have annual results from Ashoka India Equity and Gulf Investment Fund, interim results from ICG-Longbow Senior Secured UK Property Debt Investment and Africa Opportunity Fund, and a proposed placing and news of a follow-on investment by Merian Chrysalis.

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