BNY Mellon has been appointed trustee and portfolio administrator for Avoca CLO XII Limited, a €415 million collateralised loan obligation (CLO) launched by KKR. BNY Mellon will also act as account bank, custodian, registrar and paying agent for the CLO.
Arranged by Credit Suisse, Avoca CLO XII Limited is the third European CLO 2.0 KKR has launched. BNY Mellon has been appointed as trustee and portfolio administrator on all three issues. CLO 2.0s are those issued from 2009 onwards, following the credit crisis, and have more conservative structures, such as shorter investment periods and lower leverage.
CLO issuance in Europe this year has already surpassed the figure for the whole of 2013, €7.6 billion.1 BNY Mellon is the largest trustee for CLOs this year in Europe, in volume terms, with a market share of over 20%.2
'The European CLO market has had an excellent first half of 2014, building significantly upon last year's steady recovery,' said Dean Fletcher, Head of EMEA Corporate Trust at BNY Mellon. 'Institutional demand is driving the pick-up in CLO activity, with over 15 issuances so far this year.3 Investors are attracted by the higher yields that CLOs offer compared to other corporate debt. As the Eurozone economy recovers from its debt crisis and banks continue to pull back from lending, demand will continue to rise for alternative structures such as CLOs and credit funds.'
KKR is a leading global investment firm that manages investments across multiple asset classes including private equity, energy, infrastructure, real estate, credit and hedge funds.