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Infrastructure ABS boosts Italian direct lending
Further details have emerged regarding the debut syndication of an Italian infrastructure loan via a securitisation vehicle (SCI 4 May). The transaction was undertaken with aim of enabling alternative lenders to access the Italian credit market.
"The objective of the deal was to syndicate both drawn and undrawn loan commitments to non-banking institutions that were not licensed to make direct lending in Italy. To this end, the securitisation tool effectively allows alternative lenders to access the Italian credit market," explains Pietro Bellone, counsel at Allen & Overy Italy.
Société Générale is the original lender and arranger of the transaction, which securitises a portion of a loan granted to a telecommunication company by a pool of banks comprising Société Générale and other financial institutions. Allen & Overy advised Société Générale on the deal, but the other parties involved could not be disclosed, due to confidentially issues.
The transaction involves both the acquisition of receivables arising from drawdowns already made and the direct lending by the securitisation vehicle of further funds, pursuant to article 1, paragraph 1-ter of Law 130/99. "This is the first time that non-banking institutions which are not licensed to make direct lending in Italy provide financing through a securitisation vehicle for infrastructure. This is particularly important, considering the need for alternative sources of funding to support infrastructure," says Bellone.
He adds that the transaction has been structured in such a way as to get investors comfortable that they have the same economic and administrative rights and protections as if they were direct lenders. In particular, the deal - which comprises a single tranche of notes - required a lot of engineering to ensure that the bonds work effectively as a loan for the investors.
Bellone suggests that the originator is likely to bring further deals such as this to the market in the future. "There is a lot of pressure from banks in Italy to deleverage loan exposures, thus releasing resources for new financing. At the same time, we see an increasing appetite from alternative lenders to partner with banks in strategic sectors."
He concludes: "Infrastructure is a key priority in Italy and, with no doubt, this unprecedented deal will pave the way for others."
Other deal-related news
- The Hong Kong Insurance Authority has released details of the two-year Pilot Insurance-linked Securities Grant Scheme promulgated in the jurisdiction's 2021-2022 Budget (SCI 4 May).
- Mount Street has replaced CBRE as special servicer in relation to the Maroon loan, securitised in the Elizabeth Finance 2018 CMBS, pursuant to a special servicer replacement deed instigated by the controlling class D noteholders (SCI 4 May).
- Fitch will begin distributing ESG-enhanced operational questionnaires as part of its US RMBS reviews from this month (SCI 4 May).
- As US CLO primary volumes continue to fall, JPMorgan CLO research has taken stock of the market's current standing (SCI 5 May).
- Approximately 13% of US CMBS assets are located in New York City and about 80% of these properties are - in the absence of owner remediation - on track to incur Local Law 97 (LL97) fines that would impair property cashflows, according to Moody's (SCI 5 May).
- The EBA has published a discussion paper to facilitate a review of the standardised non-performing loan data templates (SCI 5 May).
- Scope Ratings has upgraded to single-A from single-A minus the two tranches issued under the SME Initiative Uncapped Guarantee Instruments for Romania deal (SCI 6 May).
- Trinity Industries has priced its inaugural green railcar ABS, following the publication of its green financing framework in January (SCI 7 May).
- Fitch's US CMBS delinquency rate rose 2bp to 4.12% in April from 4.10% in March 2021, marking the first increase after five consecutive months of decline (SCI 7 May).
- The UK FCA has launched a consultation on proposals for a new category of fund designed to invest efficiently in long-term, illiquid assets (SCI 7 May).
Company and people moves
- Investec has appointed Megan Sachs as assistant portfolio manager for its Private Debt Fund I, with responsibility for co-ordination and management of the fund, alongside her existing role in the firm's growth and leveraged finance team (SCI 4 May).
- Ruhi Patil has been promoted to managing associate in Linklaters' London derivatives and structured products department (SCI 4 May).
- Jefferies Credit Partners (JCP) has expanded its capital formation capabilities and its investor relations team with the addition of two senior hires (SCI 4 May).
- Redding Ridge Asset Management has recruited Patrick McCarthy as a principal, based in New York (SCI 4 May).
- Confluence and JPMorgan have partnered together to deliver a multi-asset portfolio analytics solution to fund managers and service providers (SCI 5 May).
- Gateley Legal has named Christopher Lister partner in its banking and finance team, based in Manchester (SCI 6 May).
- Akin Gump has appointed Deborah Festa as a partner in its corporate practice, resident in Los Angeles (SCI 6 May).
- Ommeed Sathe has joined Lafayette Square as head of strategy, responsible for leading various thematic impact-driven investment strategies (SCI 6 May).
SCI's 3rd Annual NPL Securitisation Seminar
26 May 2021, Virtual Event
SCI's 1st Annual CLO Special Opportunities Seminar
29 June 2021, Virtual Event
SCI's 7th Capital Relief Trades Seminar
13 October 2021, In Person Event