Several German SME CLOs stand to be affected by the bankruptcy filing of German soft toy and gift manufacturer Nici AG. The company applied for insolvency protection on May 16, with fraud suspected as the reason for its collapse.
The deals with exposure to the company name are PREPS 2004-2, 2005-1 - jointly originated by the Capital Efficiency Group and HypoVereinsbank - and Commerzbank's CB MezzCAP. According to market reports, three PREPS portfolios had exposure to the Nici name confirmed at 10 million ($12.7 million). CB MezzCAP is believed to have a similarly sized exposure to the insolvent company as well. However, Commerzbank had not confirmed this at press time.