Euler Hermes Rating: Securitised Debt Funds as a New Asset Class for Institutional Debt Investors

HAMBURG, Germany, November 17, 2015 /PRNewswire/ --

Euler Hermes Rating and its team of experts will be specialising more in rating transactions in the structured finance and debt portfolio markets in the future. Now that the rating agency has assigned an issuance rating to notes issued by MSD S.à r.l., institutional investors can gain exposure to securitised debt funds.

"We have observed growing market interest in securitised debt funds, especially those originated in consultation with the investors. Insurance companies appear to be particularly active at the moment," said Dr. Sascha Heller, Senior Rating Analyst at Euler Hermes Rating. "These structures are very flexible and can serve as a reasonable alternative to conventional securitisations, especially those affected by the European Commission's future criteria for simple, transparent and comparable (STC) securitisations. What is more, securitised debt funds can be based on a variety of asset classes - from simple corporate loans to leveraged loans to shipping and aircraft finance."

MSD S.à r.l. holds the majority of the shares issued by Valin Mittelstand Senior Debt Fund S.A., SICAV-SIF and finances its investment in the fund by issuing Class A and B notes. The notes rank pari-passu with each other in the SPV's capital structure. The portfolio held by Valin Mittelstand Senior Debt Fund S.A., SICAV-SIF consists of loans to German mid-market corporates, which have been identified and contacted through IKB Deutsche Industriebank AG's sales network.

"Securitised debt funds represent a good alternative to conventional structured finance instruments. We have structured Valin Mittelstand Senior Debt Fund S.A., SICAV-SIF so that institutional investors can choose between investing in the fund itself or the notes issued by MSD S.à r.l.," said Andrea Lehmann-Gutermuth, Head of Investor Services for Asset Management at IKB. "Insurance companies can even invest their restricted assets in the notes, since these instruments comply with rating requirements and have other features needed to comply with the Regulation on the Investment of Restricted Assets of Insurance Undertakings (AnlV). This way, insurance companies have the opportunity to invest in mid-market corporate debt. IKB, as the originator and servicer, provides access to this market through its extensive branch network. Mid-market corporates, for their part, have the opportunity to secure long-term fixed-rate financing of up to ten years."

Euler Hermes Rating GmbH is registered as a credit rating agency (CRA) in accordance with Regulation (EC) No. 1060/2009 of the European Parliament and of the Council and is accredited by BaFin as an external credit assessment institution (ECAI).

To learn more about Euler Hermes Rating GmbH, visit http://www.eulerhermes-rating.com

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