Friday 15 November 2019

Alternative lender BlueBay forced to alter Irish trading name

BlueBay was formed in 2013 with the help of money drawn from the National Pension Reserve Fund, as part of an initiative to get credit to small to medium enterprises
BlueBay was formed in 2013 with the help of money drawn from the National Pension Reserve Fund, as part of an initiative to get credit to small to medium enterprises

Gretchen Friemann

Global alternative lender, BlueBay Asset Management has changed its trading name in Ireland to 77gsl Ireland Corporate Credit I Designated Activity Company, after regulatory pressures forced the switch.

The moves comes as BlueBay continues to compete for market share in the increasingly competitive non-banking lending sector.

A spokesperson for the firm, which is owned by Royal Bank of Canada, attributed the name change to a "compliance issue". He said the alteration was designed to ensure the fixed income manager complies with the Volcker rule - a US measure primarily aimed at curbing risk taking among large banks.

As part of this measure BlueBay is prohibited from sharing a name with covered funds.

The firm falls under the scope of the market risk capital rule due to its parent, RBC.

The spokesperson also pointed to a provision in Irish law that restricts the use of "Ireland or Irish as a first name".

While the move was spurred by regulatory issues, the new, complex name helps submerge BlueBay's profile in the company's office.

The accounts included unusually high levels of detail about individual borrowers.

Many alternative lenders on the other hand avail of abridged accounts or channel funds into smaller, harder to trace investment vehicles.

BlueBay, which opened an office in Dublin in 2013, forged into Ireland after striking a €450m financing venture with the National Pension Reserve Fund aimed at the credit-squeezed SME sector.

Its accounts, filed for the past four years under the name, BlueBay Ireland Corporate Credit I Limited, show the firm has lent money to an array of businesses, ranging from a holding company linked to John Malone's Liberty Global which acquired Dutch cable giant, Ziggo BV, for €10bn in 2015. BlueBay also lent to Ziggo, although the scale of the loan is not disclosed.

In addition, BlueBay's Irish arm has extended credit to the debt vehicle of Eircom, eircom Finco Sàrl, via a short-term loan that expires in 2022.

According to a spokesperson for BlueBay, the firm can avail of a provision in its constitution and invest in temporary credit investments.

He said these short-term loans were aimed at mitigating the "impact of negative interest rates".

In the SME sector BlueBay has issued debt to over a dozen companies, including fast-food business Abrakebabra, the Mater Private hospital and healthcare company Aras Sláinte.

Its most recent accounts reveal the firm's first impairment charge in Ireland after the global asset manager was forced to book a €5m write-down on a loan to the fast-growing brewer, Rye River.

BlueBay wrote down its exposure to DP Financial - the parent company of Rye River, which produces the craft beer McGargles, by €4.71m to €3.12m.

The face value of the loans was €7.84m.

Irish Independent

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