Barings, an investment manager, is executing the first European middle market private credit collateralized loan obligation (CLO), Barings Euro Middle Market CLO 2024-1 DAC, at €380 million. S&P and Fitch will rate the CLO, which is backed by a portfolio of European middle market senior secured loans. Year to date Barings has priced 12 new issue CLOs globally.
“As an experienced leader in the market, Barings is proud and excited to be a first mover in the evolution of CLOs in Europe,” Adrienne Butler, head of global CLOs at Barings, said. “To date, the difficulty in creating a diversified portfolio has prevented a true middle market CLO from being executed in Europe. We have noted investor interest in this space for several years and having issued seven U.S. middle market CLOs since 2017, Barings has the knowledge and expertise to provide a solution in this untapped area of the market.”
“Due to Barings being a leading European direct lender, we were able to create a diversified portfolio of nearly 50 private credit loans representing eight countries, in addition to a European broadly syndicated loan bucket to add to the diversification,” Joe Evanchick, head of middle market CLOs at Barings, said. “Our extensive sponsor relationships resulted in the Barings European private credit platform closing over €13 billion across 153 senior transactions with 64 different sponsors in the last three years.”
“Barings Euro Middle Market CLO combines decades of experience as a leader in the middle market direct lending space with our strong track record in issuing U.S. middle market CLOs to bring an innovative solution to our clients,” Stuart Mathieson, head of European and APAC private credit at Barings, said.
Barings Euro Middle Market CLO is a static deal with a one-year non-call period. BNP Paribas served as the arranger.
“This transaction represents the strength of the full Global CLO franchise of BNP Paribas and we are delighted to have worked with Barings to bring about this important inaugural European Middle Market CLO,” Dushy Puvan, head of EMEA CLOs at BNP Paribas said.
A Dechert LLP team led by partners Aaron Scott and Christopher Duerden advised Barings on the launch.
