CDO Management

AIB Capital Markets PLC established the AIB Debt Asset Management business in 2000 to leverage off AIB Acquisition Finance's world class credit and risk systems, its excellent track record in European leveraged buy-outs and its strong access to such loans.

On behalf of AIB Capital Markets PLC, AIB Debt Asset Management manages four funds i.e. Tara Hill BV (EUR350 million), Clare Island BV (EUR425 million), Boyne Valley BV (EUR415 million) and Skellig Rock BV (EUR425 million). Currently, with EUR1.6 billion under management AIB Debt Asset Management is recognised as being one of the leading loan asset managers in Europe.

Each fund is a special purpose investment vehicle established to purchase and hold a portfolio of European leveraged loans. The purchase of the assets is funded by the issue by the vehicle of a range of securities (both rated and non-rated).

The vehicles raise funds from a variety of third party investors (ranging from commercial banks to insurance companies and pension funds) and invest in a wide range of Senior, Mezzanine and second lien loans in European leveraged buy-outs. AIB was the first European bank to enter the market to manage such loans on behalf of third parties.

The securities issued will vary in terms of risk/reward and priority of payment. The Senior Notes (rated AAA/AA) represent the higher credit quality and lower risk/reward tranche and are the first to receive any payments. Next in order of payment priority are the Junior Notes (rated BBB/BB), the intermediate layer of funding, and is the medium credit quality and medium risk/reward tranche. The final tranche is the Equity which is unrated and is the 'first loss' layer of the funding, bearing a lower credit quality and higher risk/reward profile.

The Semi-annual returns to all the investors (Senior, Junior and Equity) and ultimate repayment of the securities are dependent on the performance of the underlying pool of assets (i.e. on-going interest and fee income and final repayment of the loans). At each semi-annual payment date the net income generated during the previous six months is distributed to the investors. The payments to both the Senior and Junior Notes are limited to cost of funds plus the relevant margin and are paid ahead of the Equity. After the Senior and Junior Notes interest has been paid the Equity investors receive all of the residual net income generated.

Contact Details

Deirdre Breheny	Head of Debt Asset Management AIB International Centre IFSC, Dublin 1, Ireland Tel: +353 1 641 8958 email: deirdre.m.breheny@aib.ie
Kerry Mark MacCarthy	Director, Debt Asset Management AIB International Centre IFSC, Dublin 1, Ireland Tel: +353 1 6317391 Email: kerry.m.maccarthy@aib.ie
John Lowry	Associate Director, Debt Asset Management AIB International Centre IFSC, Dublin 1, Ireland Tel: +353 1 6417153 Email: john.g.lowry@aib.ie
Mary Daly	Director, Debt Asset Management St. Helen's, 1 Undershaft, London EC3A 8AB, England Tel: +44 20 7090 7112 Email: mary.f.daly@aib.ie

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