Harbourmaster Pro-Rata CLO 2 ruling allows continued reinvestments

By Angela McDaniels

Tacoma, Wash., July 22 – The trustee for Harbourmaster Pro-Rata CLO 2 BV’s notes due 2022 is asking the senior noteholders if they want to appeal a ruling that makes unscheduled principal proceeds eligible for reinvestment until the payment date in October 2015.

The reinvestment period for the notes ended in October 2013.

A holder of the class C subordinated notes filed a lawsuit arguing that a certain reinvestment criterion is satisfied if, when the proposed reinvestment of unscheduled principal proceeds will be made, the ratings of the class A1 notes are the same as or higher than the initial ratings of those notes, irrespective of the fact that those notes had previously been downgraded below their initial ratings.

The trustee, Deutsche Trustee Co. Ltd., said the senior noteholders’ position was that the criterion could not be satisfied because of the previous downgrade of the class A1 notes.

The class C noteholder’s claim was dismissed by the Chancellor of the High Court on April 9. The noteholder appealed, and the Court of Appeal agreed with the noteholder on July 11. The effect of the ruling is that unscheduled principal proceeds will be eligible for reinvestment until the payment date provided that the other reinvestment criteria continue to be met.

The trustee said that it will appeal the ruling to the Supreme Court if it asked to do so by the controlling class of noteholders prior to Aug. 1 and is indemnified.

The trustee sent notice to the holders of the following notes: €150 million class A1 variable-funding notes, €199 million class A1T floating-rate notes, €120 million class A2 floating-rate notes, €43.5 million class A3 floating-rate notes, €6 million class A4E floating-rate notes, €6.75 million class A4F fixed-rate notes, €2 million class B1E floating-rate notes, €14.5 million class B1F fixed-rate notes, €17.5 million class B2 floating-rate notes, €42.75 million class C subordinated notes, €15 million class S1 combination notes, €15 million class S2 combination notes, €3 million class S3 combination notes and €6 million class S4 combination notes.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.