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LPC: Lone Star exits Antares Capital unitranche joint venture
May 25, 2017 / 6:40 PM / 7 months ago

LPC: Lone Star exits Antares Capital unitranche joint venture

NEW YORK, May 25 (Reuters) - 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 mid-sized companies.

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, said Wharton.

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 Methven)

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