Dec. 1 (Bloomberg) -- Alcentra Ltd., an asset manager owned by Bank of New York Mellon Corp., said it plans to raise at least 150 million pounds ($235 million) listing a loan fund on the London Stock Exchange.
Alcentra is seeking annualized net returns of 7 to 10 percent buying leveraged buyout loans at a discount to face value, according to a regulatory filing today. The Alcentra European Floating Rate Income Fund Ltd. will target an annualized dividend yield of 5.5 percent in the first year. Alcentra, which will manage the fund, will provide at least 10 million euros ($13.5 million) of seed capital.
European collateralized loan obligations managers like Alcentra and Dublin-based Avoca Capital Holdings are raising capital for new funds through stock market listings as waning risk appetite stifles issuance of new CLOs in Europe. CLOs pool high-yield, high-risk loans and slice them into securities of varying risk and return.
Average bid prices for leveraged loans have fallen 4 percent this year in Europe, according to Markit Group Ltd.
“Lenders today are being paid more for taking less risk.” according to the statement. “Following recent concerns regarding the delayed resolution of the European sovereign debt crisis, loan prices have reduced further, offering attractive discount margins to investors in the secondary market.”
Oriel Securities Ltd. is bookrunner of the share sale.
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