Duchess I gets extension

Duchess I, the CLO fund set up by Duke Street’s Debt Management arm, which was sold to Babson Capital Europe in the spring of last year, has had its life extended. This is an innovation in CLO fund workings that Babson Capital Europe has secured, taking the life of Duchess I, which invested E1bn, out to 2017, which amounts to a four-year extension.

Babson Capital Europe said: “The primary driver for the maturity extension was to allow Babson Capital Europe to continue to invest in the primary leveraged loan market where high levels of prepayment have become normal practice. These changes are vital to ensure the funds stays fully invested in high quality assets during its reinvestment period.” The other option would have been to wind down and issue a new fund.

Babson Capital Europe manages four Duchess funds, the first two were launched by Duke Street Capital Management, under the Duke Street ownership, and the third and fourth under Babson Capital Europe.