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Vallauris II CLO able to redeem only portion of subordinated notes
By Angela McDaniels
Tacoma, Wash., Sept. 26 – Vallauris II CLO plc was unable to redeem all of its subordinated notes as planned on Sept. 26, according to company filings with the London Stock Exchange.
The company announced on Sept. 2 that it would redeem its €25.4 million of class III mezzanine deferrable interest floating-rate notes, €8.9 million of class IV mezzanine deferrable interest floating-rate notes and €32.2 million of subordinated notes on Sept. 26 at the option of the subordinated noteholders.
The company said that prior to the redemption, the collateral manager was not able to realize all of the portfolio due to the illiquid nature of a few assets, which are held against obligors that are in liquidation.
The company expects any recoveries from the illiquid assets to be no more than €70,000. Any amount received will be paid into the payment account and, to the extent that the money exceeds expenses of the issuer, the residual amount will be paid to the holders of the subordinated notes.
Nevertheless, the company said there can be no assurance whatsoever that there will be any further funds payable to the subordinated noteholders after the redemption date.
The Dublin-based issuer has established a reserve of €321,723, which will be retained in the payment account after the redemption date. This reserve has been established to pay for certain future anticipated expenses including the realization of illiquid assets. Any amount that remains after the expenses are paid will be paid pro rata and pari passu to the holders of the subordinated notes.
Meanwhile, the rated notes were redeemed in whole on Sept. 26 as planned.
The redemption threshold amount was €32,738,021.
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