Sector developments and company hires

Universities Superannuation Scheme (USS), the UK’s largest private pension scheme by way of assets, has launched its first mandate investing in ABS. Likely to exceed £1bn over the next couple of years, USS’s first ABS mandate will focus on investment grade publicly-listed securities.

The move comes a year after USS Investment Management (USSIM), the wholly owned investment management arm of USS, appointed Janet Oram to the new role of head of ABS (SCI 21 June 2021). Her appointment underlined USSIM’s commitment to develop its in-house fixed income and treasury capability and support its increasing focus on liability-driven investing.

Oram was recently joined by Colin Behar, who was recruited from Prytania Asset Management as an ABS portfolio manager. The team is currently seeking to add an ABS analyst.

Next on the agenda for the team will be a more yield-seeking mandate, partnering with USSIM's in-house private markets team.

In other news…

EMEA

Alantra has poached director Marcos Chazan from StormHarbour Securities, where he was a director in the structuring and advisory team. Based in London, Chazan was previously a securitisation structurer at Santander and has also worked at M&G, Resource America and LNR.

Alberta Investment Management Corporation (AIMCo) has appointed Craig Tipping as head of European structured credit, based in London. Tipping was previously md and European head of securitised markets group at Jefferies. Before that, he worked at Nomura, Lehman Brothers and MBIA.

Paul Hastings has added a new partner to its structured credit team in London in its latest move to secure new talent for its fast-growing London business. Jason Brooks joins the firm from CMS where he worked as a partner in the financial services and products group. His hire follows several other recent additions to the firm’s structured credit practice last year, and after the firm’s London-based CLO team handled 116 CLO transactions in 2021 alone.

North America

Alston & Bird has announced the expansion of its finance offerings in the US with the addition of new finance partner, Joseph McKernan, in New York, and counsel, Maria Merritt, in Atlanta. McKernan joins the firm with more than 25 years of experience across a broad range of complex financing transactions, which includes energy-related transactions utilising ISDA as well as other master agreements and purchase and sale agreements. He joins Alston & Bird from Hodgson Russ, where he also worked as partner – representing lenders and borrowers across a range of financings.

Similarly, Merritt brings a breadth of experience in structured financing transactions across multiple asset classes to her new role, as well as with structuring and negotiating on syndicated and single-lender debt facilities. She joins the firm from McGuireWoods where she served as an associate.

MUFG has announced the expansion of its sales and trading team with the hire of new director and head ABS trader, Ray Barretto. Joining the firm from Barclays, where he previously served as a vp in ABS secondary trading, he brings more than 20 years of experience to his new role. Barretto will be based in New York, and will report directly to head of macro trading, Michael McCarthy. He will be focused on expanding MUFG’s ABS trading platform, concentrating on building the esoteric business and enhancing the bank’s market share across the flow ABS space.

NPL investment JV inked

BCMGlobal has formed a partnership in Italy with a group of leading international institutional investors, including Swedish investment firm Albatris, in a joint venture with US-based Three Line Capital. Under the agreement, BCMGlobal has co-invested in the securitisation issued by Wings One SPE.

The partner investors aim to invest up to €100m in secured non-performing exposures in the short to medium term, focusing on real estate-backed NPLs and unlikely-to-pay exposures. As such, they have completed their first investment in the Italian market by purchasing a secured non-performing loan portfolio from a major European financial institution.

BCMGlobal acted as advisor throughout the acquisition process, assisting the partners from the origination of the opportunity through to the underwriting and deal execution. The firm has also been appointed special servicer for the securitisation, with 130 Servicing named as master servicer and corporate servicer. In the context of the securitisation transaction, 130 Servicing will also assume the roles of calculation agent and noteholder representative.

Revlon par erosion eyed

At current prices, there could be significant par erosion for CLOs from Revlon's bankruptcy filing, according to Moody’s. Nearly 140 CLOs the agency rates hold about US$300m of the firm's debt.

Excluding deals nearing end of life, 15 deals have exposures over 1%, with a peak exposure of 5.8%. The majority (95%) of CLO exposure is to Revlon’s term loan B, which was recently quoted at around 24.