Babson Capital Closes First Direct Investment in Asia, Taking Debt/Equity Stake In Yingliu International Holdings Ltd.
Springfield -- 02/10/2009 --
Babson Capital Management LLC (Babson Capital), an investment management firm based in Springfield and Boston, Mass., and Charlotte, N.C., today announced it has closed its first direct investment in Asia with a $15 million purchase of senior subordinated notes with warrants for Yingliu International Holdings Ltd.
The investment, made by Babson Capital on behalf of its parent company, Massachusetts Mutual Life Insurance Co. (“MassMutual”), will allow the Chinese manufacturer of high-precision cast steel parts and components to expand its production capacity in order to strengthen its competitive position in global markets. Equity investors in Yingliu include CDH Precision Limited, managed by CDH Investments through its CDH China Growth Capital Fund II, L.P; and China Holdings Management Co. Ltd., managed by China Everbright Investment Management Limited through its First Institution China Growth Capital Fund. China Everbright Investment Management Limited is a subsidiary of China Everbright Group, a Hong Kong Stock Exchange-listed red-chip company.
“We are proud to support Yingliu International Holdings, as well as CDH and Everbright, through this investment,” said Mike Hermsen, Managing Director, Babson Capital. “This investment represents an important asset class for Babson Capital and we look forward to pursuing similar opportunities in the Asian market.”
The Yingliu investment was arranged by Babson Capital’s Asia investment team which is part of the 18-person Mezzanine and Private Equity Group led by Mr. Hermsen, Mike Klofas and Rick Spencer, each of whom has more than 22 years experience in corporate finance. The three have been active in mezzanine finance and private equity investing for more than 17 years at Babson Capital and MassMutual. MassMutual has been active in mezzanine and private equity investing since the 1960s.
With the closing in December 2008 of $1.58 billion Tower Square Capital Partners III LP, the Babson Capital team now manages about $5 billion in direct and indirect mezzanine and private equity assets and commitments. Mezzanine securities usually consist of subordinated debt instruments with accompanying equity features, such as warrants or conversion rights. Private equity usually consists of common or preferred stock, but can also include other equity securities.
About Babson Capital Management LLC
Babson Capital Management LLC and its subsidiaries serve institutional investors around the globe and have $128.9 billion in assets under management as of June 30, 2010. Through proprietary research and analysis and a focus on investment fundamentals, we develop products and strategies that leverage our broad array of expertise in fixed income, equities, alternative, structured products, debt financing for corporations and debt and equity financing for commercial real estate. Based in Boston and Springfield, Mass., and Charlotte, N.C., with offices in New York City and Los Angeles, the firm’s subsidiaries include Babson Capital Europe Limited in London, Babson Capital Australia Pty Ltd in Sydney, and Cornerstone Real Estate Advisers LLC in Hartford, Conn. Babson Capital is a member of the MassMutual Financial Group.