CVC Credit ‘actively risk managing’ positions amid virus outbreak

By Sarah Lizee

Olympia, Wash., March 16 – CVC Credit Partners European Opportunities Ltd. said it is “actively risk managing” individual positions that it believes could be most exposed to the impact of the coronavirus outbreak.

Specifically, CVC said it is preemptively divesting positions in issuers with material Italian operations, issuers in the transportation, leisure and logistics sectors, and structured finance positions subject to higher volatility, and using sale proceeds to build up cash positions in light of the coronavirus outbreak.

“We remain in active dialogue with issuers of credit positions we currently hold, and today the portfolio remains conservatively positioned with regards to industries and regions most severely affected by recent events: (i) zero exposure to oil and gas and related sectors (ii) <10% exposure to hotels, leisure and transportation sectors and (iii) <2% exposure to issuers domiciled in China, Iran and Italy, the regions most affected by the epidemic to date,” CVC said in a Monday press release.

“In addition, refinancing risk in the portfolio remains low, with no portfolio maturities in 2020, and under 20% of the portfolio maturing in the following two years.”

The investment manager said it believes “the current environment will create attractive investment opportunities, particularly in the credit opportunities segment driven by the technical dislocation across this asset class.

“However, we remain cautious in adding new positions to the portfolio, and only where we have real conviction the issuer is well positioned in light of current events,” CVC said in the release.

The closed-ended investment company is based in Jersey.

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