Contents

CDO

Interest growing in infrastructure

Deutsche Asset Management subsidiary RREEF America has closed a US$431.3m managed project finance CDO, dubbed RIN. While the deal may signal growing investor interest in infrastructure and project finance debt, lack of homogeneity could hamper the growth of the asset class.

Moody's has rated the transaction's US$262m class A notes (which priced at three-month Libor plus 150bp) Aaa, US$49.6m class B notes (plus 190bp) Aa3 and US$55m class C notes (plus 400bp) Baa3. There are also US$64.7m in preferred shares that are unrated.

Alongside broadly syndicated loans, the portfolio must comprise at least 60% project finance loans and eligible investments. Of these assets, 45% can be in the electricity or thermal sector, up to 30% in the large infrastructure sector or up to 15% in the regulated assets/utilities sector. At least 95% of the portfolio must also consist of senior secured loans and eligible investments, while up to 5% of the portfolio may consist of second lien loans.

The RIN transaction comes at a time of growing interest in project finance and infrastructure investments. Infrastructure needs are rising globally - with the private sector becoming increasingly involved in closing the funding gap and the asset class gaining popularity among investors.

AJ Sabatelle, associate md at Moody's, says that while the asset class is not new, investors appear to be looking at it more closely than in the past, in part due to the favourable default and recovery characteristics. He adds: "Infrastructure loans are generally more resilient to defaults, especially compared to other asset classes, such as corporate loans. Furthermore, even if an infrastructure loan does default, the recoveries are on the whole quite strong and higher than corporate loans."

While Moody's has classified the deal as a CDO, this is mainly to distinguish it from a CLO, which is primarily backed by corporate loans. Al Remeza, associate md at Moody's, says: "I think it is a natural outgrowth of the CLO market and possibly reflects a growing number of investors looking to invest in project finance and infrastructure loans, but with the comfort of the CLO structure. Investors benefit from diversification and some may simply want to source different collateral and also may want exposure to a CLO type product. It remains an alternative type of investment and so it appeals to investors that are comfortable with niche products."

While aspects of the transaction may reassure investors, risks are presented by the managed nature of the product. Peter Hallenbeck, vp at Moody's, explains: "Given that the transaction is managed, reinvestment risk exists. However, the risk is partially mitigated because the portfolio manager is subject to extensive reinvestment criteria and purchase limits. In addition, no reinvestment is permitted after the reinvestment period."

He continues: "There is also concentration risk, but the assets have lower default risk and higher recoveries than corporate loans, so it is a trade-off. Additionally, our analysis considered several stress scenarios assuming higher asset correlations."

Sabatelle points out, however, that the transactions remain very bespoke, which limits liquidity in the sector and which could deter investors. While securitisation might help boost homogeneity of the asset class, Hallenbeck suggests that liquidity would be driven by increased standardisation in project finance asset documentation.

Consequently, it appears that the continued heterogeneity of the sector will constrain its expansion for the moment. Sabatelle concludes: "It is hard to say if this is part of a broader trend or whether we'll see greater issuance of similar deals. At the moment, the sector is very bespoke and a niche product and so doesn't have a cookie-cutter template that some investors want. For the time being then, it seems likely to remain a niche area."

RB

NPLs

MPS loan appraisal pending

Cerved Information Solutions, one of the largest Italian servicers, has been selected by Atlante II to manage nearly half of the non-performing loans backing Monte dei Paschi di Siena's (MPS) forthcoming €26bn securitisation (SCI 5 July). MPS can only receive the GACS guarantee for the senior tranche of the deal after a sound appraisal of the secured portion of the NPL portfolio.

According to Massimo Famularo, head of Italian NPLs at Distressed Technologies, "expected recoveries for secured loans will have to be grounded on realistic real estate appraisals, in order to meet the expectations of rating agencies". Current arrangements stipulate that MPS can only receive the GACS guarantee for the securitisation's senior tranche, if the rating agencies provide a satisfactory assessment in relation to the recovery of the secured portion.

The servicing appointment follows the Italian lender's €52.2m sale of its NPL servicing platform, Juliet, to Quaestio and Cerved. The platform will, in turn, be used to service €13.3bn of NPLs, while the remainder of the €26bn will be split between a number of servicers, including DoBank.

Details of Cerved's business plan in relation to NPL recoveries have not been revealed, although sources close to the discussions have stated that an improved economy and regulatory reforms in relation to ReoCos boost prospects for recoveries (SCI 28 September). ReoCos are a service that Cerved provides, having launched its 'ReoCo project' in June 2015 in a partnership with Creval.

Famularo observes that challenges remain. "The platform spin-off from MPS, dubbed 'Sirio', will need to fit into Cerved culture in order to gain synergies from sharing technologies, know-how and best practices."

A finalisation of the MPS transaction is expected by February or March 2018. However, the deal was expected to be completed around the same time this year, but didn't materialise largely due to last year's referendum on constitutional reform.

Sources, however, state that "this time it's different". One notes: "Besides more political stability, MPS has been recapitalised by the state in August, in an event which went more or less unnoticed. Along with pressure from the European Commission, it's hard to see why it won't close by that time."

Following extensive discussions with European regulators, MPS completed an €8bn capital increase in August, including a €3.85bn cash injection from the state. State action was prompted after €3.1bn of Q2 losses in the same month - the result of write-offs from the bank's bad loan portfolio. Besides the state's cash, the rest of the new capital came from the mandatory conversion of subordinated bonds into shares.

The August injection in turn follows the European Commission's approval of a €5.4bn precautionary recapitalisation on 4 July (SCI 5 July). As a result of the precautionary recapitalisation, MPS posted a CET1 ratio of 15.4%, compared to 8.2% at end-2016 (which would have been 1.5% without the capital injection).

As of end-June 2017, gross impaired loans at MPS are down by approximately €500m, compared to March 2017. The gross NPE ratio stands at 19.8%, compared to 35.7% in March 2017, while the net NPE ratio is at 11.7%, as opposed to 19.7% in March 2017.

Yet at the same time, net interest income fell by 12.7% in the first half of the year because of the negative trend in interesting-bearing assets, especially commercial loans.

SP

Structured Finance

SCI Start the Week - 16 October

A look at the major activity in structured finance over the past seven days.

Pipeline
Additions to the pipeline last week were heavily skewed towards ABS. There were 20 ABS names added, along with two RMBS, a CMBS and two CLOs.

The ABS were: €958.4m Alba 9; US$235m Ascentium Equipment Receivables 2017-2 Trust; US$1.182bn BMW Vehicle Lease Trust 2017-2; US$1.05bn CarMax Auto Owner Trust 2017-4; US$350m Credit Acceptance Auto Loan Trust 2017-3; US$999.62m Dell Equipment Finance Trust 2017-2; US$157m Elara HGV Timeshare Issuer 2017-A; US$600m Enterprise Fleet Financing 2017-3; C$396m GMF Canada Leasing Trust Series 2017-1; US$297.8m Marlette Funding Trust 2017-3; US$605.5m METAL 2017-1; MOCA 2017-1; US$307.5m Mosaic Solar Loans 2017-2; US$437.35m NextGear Floorplan Master Owner Trust Series 2017-2; US$200m PFS Financing Corp Series 2017-C; US$200m PFS Financing Corp Series 2017-D; Renew 2017-2; SCF Rahoituspalvelut Kimi VI; US$369.38m Utility Debt Securitization Authority Restructuring Bonds Series 2017-1; and €1bn VCL 25.

Sapphire 2017-2 and Warwick Finance Residential Mortgages Number Three were the RMBS, while the CMBS was US$1.1bn JPMDB 2017-C7. The CLOs were €361.2m Cairn CLO VIII and €435m St Paul's CLO IV.

Pricings
There were also half a dozen ABS prints, five RMBS, three CMBS and 13 CLOs.

The ABS were: US$196.3m CPS Auto Receivables Trust 2017-D; US$300m First National Master Note Trust Series 2017-2; US$662.2m Navient Private Education Loan Trust 2017-A; €900m Sunrise 2017-2; €486.5m TitriSocram 2017; and US$1.4bn Verizon Owner Trust 2017-3.

The RMBS were: A$750m HBS Trust 2017; US$1.07bn New Residential Mortgage Loan Trust 2017-6; A$1.63bn Securitised Australian Mortgage Trust 2017-1; US$670m STACR 2017-HQA3; and £255m Tower Bridge 1.

The CMBS were: US$955m BX Trust 2017-IMC; US$460m DBUBS 2017-BRBK; and US$410m Hyatt Hotel Portfolio Trust 2017-HYT2.

The CLOs were: US$507.75m Auburn CLO; €298.8m Babson Euro CLO 2015-1R; US$472.45m Barings CLO 2015-2R; US$395.65m BlueMountain CLO 2013-2R; €246m Cairn CLO 2013-3R; US$405m Halcyon Loan Advisors Funding 2015-1R; US$461.3m Halcyon Loan Advisors Funding 2017-2; €358.5m Harvest CLO 2015-14R; US$510m Marble Point CLO X; £294m Newday Partnership Funding 2017-1; US$406.715m NXT Capital CLO 2017-2; US$611m OZLM 2017-19; and US$455.9m Park Avenue Institutional Advisers CLO 2017-1.

Editor's picks
NPL platform to boost recoveries: The creation of a non-performing loan platform by Portugal's three largest banks - Caixa Geral de Depósitos (CGD), Banco Commercial Português (BCP) and Novo Banco (NB) - is expected to speed up recovery processes. However, the impact on the three banks' asset quality is likely to be limited...
ILS issuance hits all-time highs: The insurance-linked securities market has seen a surge in new issuance this year, with 1H17 witnessing the largest monthly, quarterly and half-year volumes on record. The largest-ever deal size was also recorded and overall market outstandings topped previous peaks...
C-PACE lender breaks new ground: Greenworks Lending has privately placed the first rated securitisation of purely commercial PACE assets. While the firm intends to tap the market again in the near future, potentially with a public C-PACE deal, the present emphasis is on origination of high quality assets by meeting the needs of commercial real estate property owners...
Refi success depends on timing: Refis from the final quarter of last year appear to have pulled the trigger too early as they reduced their debt costs by less than those US CLOs that refinanced this year. While refis from 4Q16 outperformed only briefly before later once more underperforming issuance cohorts, refis from 1Q17 and 2Q17 have enjoyed outperformance without then succumbing to underperformance...
Treasury report supports securitisation: The US Treasury has released a report recommending a number of regulatory changes that could make it easier for companies to issue and invest in securitisations. The second in a series on boosting the US financial system, the report stresses the importance of securitisation to a strong economy and suggests repealing elements of the Dodd-Frank Act and lightening other regulatory burdens, although it stops short of a complete repeal of the risk-retention rules...

News
• Business Jet Securities series 2017-1 exposes investors to multiple risks - including performance volatility, transaction structural risks and a servicer with a limited track record - according to Fitch. The corporate jet aircraft ABS is not rated by the agency, which notes that the deal does not meet its investment grade standards.
• Natixis has established a secured funding facility in the form of an SPV, dubbed Rembrandt Dutch Mortgages. The facility will fund mortgage loans, with the borrower exiting the vehicle via a securitisation or a whole loan portfolio sale.
• The latest reform of the French finance sector introduces a new category of financing vehicle that is expected to benefit both classic securitisation and risk transfer structures. The reform - the first phase of which is due to be finalised in January 2018 - also expands the legal tools available to French banks for refinancing their loan exposures.

Capital Relief Trades

Risk transfer round-up - 20 October

Rumours abound of new capital relief trades being prepped. One source suggests that ING is readying a bilateral Dutch SME transaction with PGGM as the investor. Another indicates that Credit Suisse is arranging a trade for Austrian lender Raiffeisen.

Meanwhile, a Barclays significant risk transfer deal has reportedly been delayed until early November. The transaction was due to be completed in mid-October, after being postponed in September (SCI 22 September).

Insurance-linked securities

Mortgage ILS landmark imminent

United Guaranty is in the market with Bellemeade Re 2017-1 (see SCI's deal pipeline). The mortgage insurance securitisation is the first of its type to be publicly rated, potentially opening the gates for an increase in similar issuance.

The US$368.11m mortgage insurance-linked securitisation (mortgage ILS) has been rated by Morningstar Credit Ratings. The agency has assigned a preliminary rating of triple-B to the US$195.1m M1 class of notes.

Morningstar has rated the US$154.608m M2 notes double-B minus and the US$18.406m B1 notes single-B plus. It has not rated the US$165.652m class B2 notes.

Prior to the issuance of Oaktown Re Series 2017-1 (SCI 26 April), United Guaranty had been the only mortgage ILS sponsor. The US$211.3m Oaktown transaction was a private deal brought by National Mortgage Insurance Corporation.

United Guaranty issued Bellemeade Re Series 2015-1 (SCI 7 August 2015) in August 2015 and Bellemeade Re II Series 2016-1 (SCI 10 May 2016) nine months later (see SCI's deal database). Each of those deals was sized at just under US$300m, so the latest iteration also marks a significant step up in size.

The offered notes of Bellemeade Re 2017-1 are exposed to the risk of reinsured losses on the mortgage insurance policies issued by United Guaranty Residential Insurance Company, United Guaranty Mortgage Indemnity Company and Arch Mortgage Insurance Company, all of which are subsidiaries of Arch Capital Group. The underlying balance of mortgage loans covered by the policies is US$29.3bn and the mortgage insurance policy coverage amount is US$7.36bn.

The collateral pool consists of amortising, fixed and variable rate, first-lien loans that have never been reported as in default as of the cutoff date. It is geographically diverse, with California accounting for the largest state concentration at 8% of the balance.

No actions have been taken regarding loans secured by properties in areas affected by hurricanes Harvey or Irma, or in the areas in California affected by wildfires. Morningstar say the master policies covering those loans contain clauses which generally exclude claims arising because of physical damage to the property.

Bellemeade Re 2017-1 is expected to close a week today, on 25 October. The final scheduled payment date is October 2027.

JL

NPLs

Montepio NPL deal marketing

A €142.5m Portuguese non-performing loan securitisation has hit the market. Dubbed Hefesto STC, the transaction is backed by a portfolio of secured and unsecured NPLs originated by Caixa Economica Montepio Geral.

The majority of loans in the portfolio defaulted between 2011 and 2017 and are in various stages of the resolution process. The secured loans will be serviced by Whitestar Asset Solutions, while the unsecured loans will be serviced by Hipoges. Where a borrower has both secured and unsecured loans, the servicing will be undertaken by Whitestar.

Given the nature of the collateral and the defaulted status of all loans included in the portfolio, the collections received will be the primary source of payment under the notes. As a result, DBRS notes that there is significant reliance on Whitestar and Hipoges's ability and performance as servicers in executing their respective business plans. Nevertheless, the agency views the granularity of the portfolio, the presence of a cash reserve and the experience of the servicers as mitigating factors for this risk.

DBRS has assigned provisional ratings of triple-B to the deal's €123m class A notes and single-B (low) to the €19.5m class B notes. The ratings are based on the agency's analysis of the projected recoveries of the underlying collateral, historical performance, expertise of the servicers, the availability of liquidity to fund interest shortfalls and SPV expenses, a cap agreement with JPMorgan and the transaction's legal and structural features.

In its analysis, the agency assumed that all loans are disposed of through both a judicial and an extra-judicial resolution strategy. Both the timing and value stresses are based on the historical repossessions data of the servicers, with the class A and B note ratings assuming haircuts of 23.6% and 4.9% respectively to the servicers' business plans for the portfolio. Cumulative base-case recovery amounts of €161.8m and €182.5m were assumed at the triple-B and single-B (low) stress levels respectively.

In a separate development, Banco de Portugal has concluded the sale of Novo Banco to Lone Star (SCI 3 April). The sale involves a cash injection by the new shareholder of €750m, which will be followed by a further injection of €250m to be delivered by end-2017. Lone Star and the Portuguese Resolution Fund will hold 75% and 25% of Novo Banco's share capital respectively.

CS

RMBS

Participation interest deal prepped

Freddie Mac is in the market with the first in a new series of risk transfer RMBS, backed by a US$1.252bn portfolio of 3,231 conforming and super-conforming fixed-rate mortgages. Dubbed STACR 2017-SPI1, the collateral is housed in a participating interest (PI) trust, which will issue certificates for every loan in the form of pass-through certificate (PC) participation interests and credit participation interests.

Unlike previous post-crisis prime jumbo or GSE-sponsored securitisations, there will not be any pool level performance triggers in this transaction. Instead, the performance triggers are set at a loan level.

The PC trust agreement requires Freddie Mac to repurchase a PC participation interest from the related PC trust due to delinquency or imminent default of the borrower on a loan backing the PC participation interest. The SPI trust will, in turn, be obligated to acquire any PC participation interest repurchased by Freddie Mac from the PC trusts. Collections from each mortgage loan will be allocated proportionate to the participation interest held by the PC trusts and SPI trust.

On the closing date, the class X balance will be zero but will increase by the PC participation interests repurchased from the PC trust. The class X certificate will accrue interest and will be senior to other certificates issued by the SPI trust.

If the interest accrued on the class B certificate is insufficient to absorb any reduction in interest amount caused by modification and extraordinary expenses, the transaction allows for certain principal payments to be re-directed to cover interest shortfall to the rated certificates, with a corresponding write-down of class B principal balance. As a result, before Classes M1 or M2 suffer any unrecoverable interest shortfall, the class B certificate balance has to be reduced to zero.

Freddie Mac, as the master servicer, will make advances on delinquent principal and interest for every loan until it becomes 60-days delinquent, as well as make advances necessary to preserve the PI trust's interest in the mortgages. The SPI trust will also receive its proportionate share of advances made by the master servicer.

Advances will be reimbursable to the master servicer from subsequent mortgagor payments or liquidation proceeds, principal payments on other mortgage loans and the termination price.

Moody's has assigned provisional ratings to the transaction of Baa3 on the US$20.66m class M1 notes and B2 on the US$16.9m M2s, while the US$12.52m class Bs are unrated. There are also unrated class X and class R notes. The coupon on the rated notes is 4%, rising to 4.4% for the class X notes, with the final coupons impacting the amount of interest available to absorb modification losses before the notes are written down.

The class X certificates could potentially increase the WAL of the subordinate certificates, which has been identified as a transactional weakness by Moody's. Furthermore, the certificates senior to the class B certificates will be exposed to interest shortfalls, due to interest rate modification and extraordinary expenses after class B principal has been reduced to zero.

Freddie Mac doesn't provide direct loan-level R&Ws, but they are made by the individual loan sellers/servicers. Unlike STACR DNA and HQA transactions, the rated certificates do not have a 12.5-year bullet maturity payment and are not the direct obligations of Freddie Mac. As a result, certificate holders are exposed to any loans with defects for longer - although the risk is largely mitigated by Freddie Mac's strong quality control process and alignment of interest with investors.

A transactional strength is that the mortgage loans satisfy Freddie Mac's underwriting requirements, are current and have never been 30 or more days delinquent. The high quality collateral is further demonstrated by the high weighted average FICO score of 757 and weighted average original LTV of 77.4%. While 32.1% of the loans have original LTVs of over 80%, these are covered by mortgage insurance.

Additionally, they are outside of Federal Emergency Management Agency (FEMA) designated disaster zones, in which FEMA has authorised individual assistance to homeowners as a result of Hurricanes Harvey, Irma and Maria. However, the top 20 loans - comprising 1.28% of the aggregate pool - have high concentration in California (48.4%), which could have exposure to the current wildfires.

Sellers on the transaction include Steams Lending (at 36.1% of the loans), Caliber (at 18.8%), Sierra Pacific (at 14.7%), Wells Fargo (13.9%) and Plaza Home Mortgage (9.2%). The rest of the sellers make up less than 5% of the balance.

Underwriters on the deal are Bank of America Merrill Lynch, Barclays, Citi, Wells Fargo and Williams Capital.

RB

Capital Relief Trades

CRT outlook bullish

Optimism prevailed at SCI's recent Capital Relief Trades Seminar, where panellists were bullish on the future of the risk transfer market. While capital relief trade activity has slowed this year compared to last, speakers concurred that issuance will grow in 2018, with a greater number of issuers and asset classes emerging.

Kaikobad Kakalia, cio, Chorus Capital Management, said: "Towards the end of 2016 there was a big rush to complete deals and so issuance in 1H17 looked lower in comparison. However, this may not be the case for the whole year, as issuance typically picks up in Q4. I would also add that there have been a number of large bilateral deals done in 2017, which were less visible publicly, and fewer investors participated."

He added that the year ahead should see an uptick in issuance on the back of regulatory agreements and that the synthetic model will persist. "For 2018, I am bullish and I think it will be a strong year for issuance. Regulatory changes, their implementation timelines, as well as grandfathering, should be agreed. Once uncertainty is reduced, issuance will start to pick up."

He continued: "Implementation of IFRS 9 could also create an incentive for banks to use risk-sharing transactions in order to mitigate capital impacts. 2018 will see more trades issued. We expect most capital relief trades to be issued in synthetic securitisation format, although it's possible that we will see growth in true sale transactions as well, as banks securitise consumer assets for capital relief purposes."

Francesco Dissera, md at StormHarbour, also commented on 2017 being a "year of pause" for the CRT sector, with only around 13 deals completed so far. He said, however, that this is mainly because the period towards the end of last year saw a flurry of activity, with issuers trying to meet the expected grandfathering period.

Of 2018, Dissera echoed Kakalia's expectation for greater CRT issuance, but suggested that other challenges may appear. "We expect to see more issuance in southern European jurisdictions, greater issuance of CRTs in the next 12-18 months and to see more support from the supranationals (EIF, EIB inter alia with the Investment Plan for Europe)."

He added: "I think we'll also see a reduction in the traditional investors and it will be harder to maintain double-digit or high single-digit returns from the sponsors. We may also see greater focus on contingent CRT transactions, following the new ECB guidelines on provisioning on NPEs."

Regarding the development of funded versus unfunded transactions, panellists agreed that while there is some demand for unfunded transactions, funded transactions will continue to dominate. Part of the reason for this is that there is a perceived volatility associated with unfunded deals. Unfunded deals are therefore counterproductive, according to one panellist, as that is what CRT transactions are essentially aiming to minimise.

Kakalia observed: "I believe funded transactions will dominate; however, there is space for unfunded transactions. I think banks look for unfunded protection in asset classes where funded transactions are inefficient. A combination of funded and unfunded tranches could also be an option."

In terms of what the growth areas will be for 2018, panellists agreed that the future will see new players coming to the market and existing firms becoming repeat issuers. Panellists also suggested that 2018-2019 will see the emergence of CRT deals for shipping and aviation, alongside a growth in the number of renewable assets involved in CRTs, such as wind and solar-based assets.

Kakalia said: "I think we'll see more of the same. Large corporate and SME loan transactions will continue to dominate issuance. Banks which have issued their first transactions in 2016-2017 will return with repeat transactions. We should see the number of issuers and assets classes expand further. I also believe that we will see more transactions focused on green assets: ESG compliance features will grow in popularity."

Dissera agreed that the coming months will see more similar transactions and repeat issuers coming to the market, but added that not all CRT transactions will follow STS guidelines. He concluded: "We will possibly get a greater number of non-STS backed collateral. It's not yet applicable to the synthetic market, but it is likely that some 'portfolios' that do not fit in the STS definition (e.g. lack of granularity) will not be supported within the STS definition. I agree too that we'll see more long-dated assets."

RB

Structured Finance

Job swaps round-up - 20 October

Australia

Baker McKenzie has recruited Duncan McGrath as a partner in its corporate group in Sydney. McGrath was previously a partner at Gilbert + Tobin, where he established and headed the firm's DCM and securitisation practice. His experience includes leveraged and general finance, peer-to-peer lending, insolvency and restructuring, blockchain and smart contracts.

EMEA

Orchard Global Asset Management has hired Shawn Cooper as a portfolio manager at its London office. Cooper was previously at Brevan Howard, also as a portfolio manager, and prior to that was head of European ABS and CDO trading at Deutsche Bank.

RateSetter has been granted full regulatory authorisation by the UK FCA. This is despite having to leaving the industry trade body, the P2PFA, for breaching its code of conduct on transparency (SCI 22 September).

Spire Partners has hired Ian Richardson and Antoine Pinton. Richardson was previously a director in CIC's leveraged finance team. Pinton joins from Mediterranean Bank, where he was a credit analyst.

North America

Linklaters has recruited Doug Donahue to its New York capital markets practice as a structured finance and derivatives partner. Donahue is a derivatives lawyer, who represents both buy- and sell-side institutions in connection with the development, structuring, negotiation and documentation of a wide variety of financial products. He was previously a partner at Mayer Brown.

Angel Oak Capital Advisors has hired Nichole Hammond as co-portfolio manager - alongside Matthew Kennedy - of its High Yield Opportunities Fund, based in the firm's Seattle office. Most recently, Hammond led research and portfolio positioning for the global banking and finance sector of Wells Capital Management's Montgomery Core Fixed Income team. Before that, she worked as a credit research analyst for the investment grade portfolio at GE Financial Assurance. Angel Oak's High Yield Opportunities Fund invests across an array of high yield securities, including CLOs.

Crayhill Capital has hired Shamafa Khan as md, head of marketing and investor relations. Khan was previously at Barings as director, institutional sales.

BlueMountain Capital Management has elected Brandon Cahill, Sarah Dahan and Josh Drazen as partners, effective 1 January 2018. Cahill joined the firm in 2004 and is primary portfolio manager at BlueMountain investing in CLO tranches, and also oversees BlueMountain's synthetic CDO and mortgage strategies. He was previously an analyst in Citigroup's global project and structured trade finance group. Dahan joined BlueMountain in 2008 and is the lead portfolio manager for BlueMountain's global volatility and cross-markets strategy. She is based in the firm's London office and previously worked in the New York office. Prior to joining BlueMountain, Dahan worked in proprietary trading at JPMorgan, where she traded agency mortgages and options on mortgages. Drazen is head of the investment strategy and product development teams. He joined BlueMountain in 2007 and previously served in the corporate strategy groups at both JPMorgan and Citi, where he developed strategic solutions across sales and trading, corporate and investment banking, equity research and retail brokerage.

White & Case has promoted two New York-based lawyers with experience in securitisation and asset-based finance to its partnership, effective on 1 January 2018. James Fogarty has been named a partner in the firm's global capital markets practice, focusing on complex structured transactions, including whole business securitisations, CLO issuances and rental car fleet financings. Rebecca Gottlieb has been named a partner in its global banking practice, advising clients on matters including acquisition finance, asset-based financings, exit financings and restructurings.

Vickie Tillman is stepping down as president of Morningstar Credit Ratings after five years at the firm. Effective 31 December 2017, Tillman will continue to work with the firm to find a suitable replacement.

ILS

John Butler has joined Cohen & Company as md, developing and managing its US insurance asset management platform and global ILS programme. He was previously UK ceo and US president and managing partner at Twelve Capital.

Apex Fund Services has hired Mathew Charleson to lead an expansion of its service capabilities in the insurance fund market. Apex aims to deliver a local full service offering from Bermuda to investment vehicles with insurance and ILS and will harness the platform it acquired in August through the purchase of Equinoxe Alternative Investment Services, which will be rebranded as Apex Insurance Fund Services. Charleson joins Apex from Kane LPI Solutions as head of insurance fund services, subject to immigration and regulatory approval.

Horseshoe Re has promoted Yulanda Francis to president. Francis was previously svp at the firm and continues in her role as head of Horseshoe Re, responsible for the day-to-day management of collateralised reinsurance transactions, as well as client servicing.

Joint venture

Oppenheimer Funds and The Carlyle Group have launched a new joint venture, which will provide global private credit opportunities for HNW investors and advisors primarily focused on the US market. It will begin operating in 2018 and will be led by co-heads Kamal Bhatia, head of investment solutions for Oppenheimer Funds, and Mark Jenkins, head of global credit for The Carlyle Group. The joint venture's initial focus will include allocation and underwriting across investments in opportunistic credit, direct lending, distressed transactions and structured credit assets in the US, Europe and Asia.

Acquisition agreed

First Eagle Investment Management is set to acquire NewStar Financial, with NewStar stockholders expected to receive a total consideration estimated at US$12.32-US$12.44 per share (depending on whether the transaction closes in 2017 or 2018). In a related transaction, NewStar has entered into a definitive agreement to sell a portfolio of investment assets - including approximately US$2.4bn of middle-market loans and other credit investments - to a newly formed investment fund sponsored by GSO Capital Partners, whereby NewStar's current investment team will continue to service the portfolio. Following completion of these transactions, First Eagle plans to offer its new credit strategies to institutional and retail investors.

Restructuring

Radian Group is set to restructure its mortgage and real estate services segment, following a strategic review of the business, and expects to incur pre-tax charges of approximately US$20m (consisting of US$8m in asset impairments, US$7m in employee severance and benefit costs, US$3m in facility and lease termination costs, and US$2m in contract termination and other restructuring costs) within the next 12 months. Under the restructuring plan, Radian has eliminated the position of president of the services business and Jeff Tennyson will step down from the role effective immediately, although he will assist with the management transition through 11 November. Other strategic actions designed to strengthen the company's financial position include a three-year US$225m unsecured revolving credit facility, a US$450m IPO and tender offers to purchase for cash a portion of its senior notes outstanding.