The new fund established by former Credit Suisse Group AG star debt trader Hamza Lemssouguer was behind an emergency loan to help Consolis SAS, a building material company owned by Bain Capital hit by the rising cost of steel.
(Bloomberg) — The new fund established by former Credit Suisse Group AG star debt trader Hamza Lemssouguer was behind an emergency loan to help Consolis SAS, a building material company owned by Bain Capital hit by the rising cost of steel.
Arini provided a 30 million-euro ($30 million) super-senior term loan to the French company earlier this summer, according to a person familiar with the matter, who asked not to be identified as the details of the deal are private.
It’s one of the highest-profile investments for Arini, which started trading in early 2022. The fund’s assets under management have grown to about $1.5 billion, which Lemssouguer raised from Squarepoint Capital LLP and other investors.
Arini is also heavily invested in Consolis’ bonds, which the fund began buying when they were trading at 90 cents on the euro. Purchases continued as bonds dropped to around 70 cents, the person said.
High Steel
Lemssouguer’s fund came to the rescue of Consolis as the company, controlled by private equity firm Bain since 2017, will see its profitability drop amid high steel prices. Cost of input materials has started to gradually reduce from peak, according to a corporate presentation in late July.
The new super-senior facility effectively reduced possible recovery for existing creditors in case the company went insolvent, according to analysts at S&P Global Ratings. The new loan for Consolis is issued out of certain entities of the group based in Poland, Spain and Germany which are not pledged as guarantees to Consolis’ bonds and revolver facility, S&P said in a report in late August.
“Defaults observed in the past two years lead us to expect the non-guarantor debt will rank prior to the restricted group debt,” S&P analysts led by Ananita Jeanmaire wrote. “Recovery prospects for the senior secured holders are slightly slower.”
A representative for Arini declined to comment on the deal. Spokespeople for Bain and Consolis weren’t immediately available to comment.
Arini – named after the parrots that its founder breeds in his free time- has been bolstering its ranks as it continues to ramp up its activities. Earlier this year, it hired managing director Stan Fedorenko from Centerbridge, where he had worked since 2006.
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