In March 2007, ACP Capital announced that it had begun to warehouse assets (of which approximately £15 million are warehoused at present) for a new Managed Vehicle, ACP Senior High Yield, which is intended to focus on acquiring senior debt assets originated primarily through ACP Capital's SME-focused integrated finance business, and through the primary and secondary markets.
Once fully launched later in 2007, ACP Senior High Yield is intended to offer investors a secure, high-yielding product targeting a stabilized dividend yield in the region of 8-10% from its senior debt holdings, with partial downside protection provided by ACP Capital.
As a result, ACP Senior High Yield is intended to offer investors a product that has the equivalent risk profile of a corporate bond fund but with the potential for a greater dividend yield.
ACP Senior High Yield will be distinct from ACP Mezzanine in that it will not underwrite loans, will offer investors partial capital protection and will focus on high-yielding, more-secure senior debt rather than mezzanine assets.
On 8 March 2007, ACP Capital secured a committed leverage facility of £125 million with Deutsche Bank for the warehousing of assets on ACP Capital's balance sheet which will continue to be utilized within ACP Senior High Yield once fully launched.
