| NEW YORK
NEW YORK May 25 The Middle Market Growth
Program (MMGP), a joint venture between middle market lender
Antares Capital and LStar Capital, the credit affiliate of
private equity firm Lone Star Funds, is breaking up.
Antares spokesperson Carol Ann Wharton confirmed that Lone
Star has exited the partnership, but noted there will be no
change for borrowers currently in the program. Antares and LStar
will continue supporting current outstanding commitments, but
will not do any new deals through the MMGP, she said.
The program provided unitranche loans of up to US$350m to
Unitranche loans combine senior and subordinated debt into
one credit instrument, provided to the borrower at a blended
cost of capital. The structure gained favor among private equity
sponsors for its ease of execution, in particular when market
conditions turn volatile.
To date, there are 16 borrowers in the MMGP, totaling nearly
US$2bn in assets.
The program was originally launched in 2014 as a joint
venture between GE Capital and the Lone Star affiliate, but was
stopped following the sale of Antares, GE Capital's sponsor
finance business, to Canada Pension Plan Investment Board
(CPPIB) for US$12bn in June 2015. The MMGP was later restarted
as a joint effort between Antares and LStar in December 2015,
Antares, however, will continue to offer the unitranche
product as part of its core offering through a combination of
its own balance sheet, asset management partners and
institutional loan investors, said Wharton.
Private equity firm Lone Star Funds did not immediately
return a call for comment.
(Reporting by Leela Parker Deo; Editing by Lynn Adler and Jon