Credit funds said to see opportunity in UK SME loan scheme

Credit hedge funds are looking to finance books of SME loans originated under the UK government’s Coronavirus Business Interruption Loan Scheme (CBILS), subscribing for the equity in private securitization vehicles backed by the loans. The government guarantees are likely to improve the financing terms on offer, boosting returns for funds that can access these assets — but there are still questions over the details of the scheme.