Contents

CMBS

US CMBS divergence eyed

CMBS issuance 'will be hindered' by worsening borrower terms

US CMBS is under scrutiny as figures have emerged showing weaker performance in post-crisis transactions originated by non-bank firms than those originated by banks, according to a recent report from Fitch’s CMBS team. Concurrently, CMBS borrowers are finding themselves in an ever weakening position due to the growing ubiquity of loan provisions that can ‘arbitrarily’ put cash management in the hands of servicers.

According to Fitch, as of the end of 2018 cumulative CMBS 2.0 defaults in CMBS conduits rated by the firm totalled 243 loans, with an original balance of US$3.4bn. As such, the cumulative default rate by loan count for nonbank originators was 2.3%, which was nearly double the 1.2% rate for bank originators.

Fitch adds that while the number of nonbank originated defaults, 124 loans or US$1.26bn, and bank originated defaults, 119 loans or US$2.19bn, was similar. However, total CMBS 2.0 bank originations were more than 80% higher than nonbank originations, the agency adds.

Anne Hambly, founder and ceo of 1^st Service Solutions, suggests that this divergence could stem from different experience levels and motivations behind banks and non-banks. She says that banks have been involved in CRE lending for hundreds of years, while non-banks “however have opportunistically got involved to take advantage of the yields on offer.”

She adds: “These non-banks perhaps haven’t got the discipline or the processes to provide the same quality of CMBS lending. Equally it’s possible that non-banks are slightly [happier] with taking greater risks, while banks are perhaps more risk averse.”

A rise in defaults is certainly on Hambly’s radar as a concern for the sector, she says, and comments that there has been a rise in loan defaults and loans transferring into special servicing. She adds that this is a result of the many major retailers in the US closing or filing for chapter 11, with ShopCo being the latest, victim, while the merger of Walgreen and Rite Aid has also had a substantial negative impact.

Despite this, she says that investors may often be unaffected by these closures in the short term. “While it’s true that investors in diverse CMBS pools may not see major losses, some of these retailers are the main tenant in a CMBS transaction and that can have a big impact - that’s a 100% loss and you’re left with an empty building which could have a big impact in single borrower transactions,” comments Hambly.

She adds: “Investors in CMBS pools, however, may be unlikely to see large losses on single retail bankruptcies, especially as they are protected by large amounts of credit enhancement and subordination.”

For Hambly, however, US CMBS investors are not her biggest concern. Instead, she suggests that one of the major challenges for the sector is the introduction of springing cash management provisions in around 70% of new loans provided to borrowers.

“In a typical scenario,” says Hambly, “the borrower gets the loan and then collects money from the tenant in the property. Under the springing cash management provision, a servicer can take control of cash management for a variety of reasons, usually relating to changes in the original agreement with the tenant or if the lender feels there is a threat to the payment of the loan.”

Furthermore, she suggests that much of the process is at the discretion of the lender, who can make “quite arbitrary” decisions. Hambly adds that she knows of one borrower who allowed its tenant to go without paying a month’s rent in return for signing a ten year contract, leading to the lender deciding this warranted the activation of springing cash management and the servicer taking control.

This can create huge problems for borrowers, says Hambly, as “they may have got the money together to buy the property from a range of investors. Once cash management has been removed from the borrower, the investors don’t have the same security and the borrower doesn’t have the ability to provide returns to these investors.”

While springing cash management may be bad for borrowers, Hambly concedes that it isn’t a bad thing for end investors in the CMBS transaction itself, as it generally makes a deal stronger and makes payment more secure. The bigger picture, however, is that it is rarely a positive thing for borrowers and as such will “only dampen borrower appetite for CMBS, which will hinder issuance.”

She adds that the impact of this can already be seen when, at the last refinancing wave, the majority of borrowers refinanced out of CMBS in order to utilise a different method of funding. Hambly concludes: “The industry needs to wake up to the fact that without customers, you’ve not got an industry. There have been a number of initiatives to try and improve standards for borrowers, but they’ve never had the borrowers involved in the process, so they’ve generally failed.”

Richard Budden

Derivatives

CDS 'falling short'

Equity options benefits highlighted

Issues around liquidity and investor confidence may have rendered CDS ineffective as a means of modelling and hedging risk for credit investors. Equity options have now emerged as a potential alternative, offering various benefits such as faster hedging speeds and greater pricing accuracy.

Michael Hayes, executive director, model validation and best practices research at MSCI, comments that while CDS indices, are “definitely more liquid and can work well as a hedge for market-wide credit”, they lack the depth of names that they’re hedging against. Consequently, he says that they aren’t very effective at hedging single-name exposure, which is especially true if one name leaves an index.

“While CDS indices are more liquid,” he says, “sometimes issuers can get excluded and liquidity can dry up.” Additionally, Hayes suggests that the behavior of spread volatility is the key input to understanding risk exposures.

“In North American IG, for example, you’ve got 125 issuers and this is replenished twice a year. However, after Cisco left the index we found that it no longer tracked the CDX index spread. Its bond spreads, however, continued to track the overall market”, says Hayes.

More specifically, he adds, CDS spread return correlation with the CDX index declined from 65% to 44% after Cisco was removed from the index, and its risk declined from 5.2% to 3.7%. He says that the bond spread risk was more consistent, however, and that prior to 2014 the spread volatility was 9.6%, but after 2014 it was 9.0%.

Hayes suggests that with equity options “you get more certainty on the price as these are updated daily and there is no dispute over it.” Contrastingly, in single-name CDS you have a lack of clarity over the price, adds Hayes, with concerns around default event determination, which impacts the pay-out.

Additionally, Hayes notes: “A scarcity of trading activity in the CDS market has historically meant that dealers had less incentive to publish reliable quotes. Consequently, the quoted spreads of non-index constituents have not necessarily reflected the true cost of CDS protection.”

In terms of the firms that might utilise to equity options, Hayes says that these are much the same as any firm that uses credit derivatives to manage risk. These broadly fall into three categories: “hedgers” that use them to manage risk through buying protection, active managers taking directional bets in either direction – such as hedge funds or proprietary trading shops - and finally are market makers, such as broker-dealers.

Hayes moots that firms such as these should consider looking at equity options as a strong alternative to the CDS market for managing risk. He notes that “historically, large credit and equity downturns tend to occur simultaneously” and if that relationship continues to hold, “an out-of-the-money put option on the issuer’s equity would provide an alternative credit hedging mechanism.”

Equity options do come with their downsides, says Hayes, adding that they are not as liquid as cash equivalents, but points out that they’re still more liquid than single-name CDS. This means investors “can quickly take a hedging position, while this speed isn’t available in the single-name CDS market.”

A bigger downside, perhaps, is that the correlation between equity and credit downturns is only in the extreme, meaning equity options may be less effective as a mark-to-market hedge. Heyes concedes, therefore, that equity options only really make sense in hedging a wider downturn and aren’t very effective in hedging the day-to-day movement in a company’s profit and loss.

“However,” he concludes, “in contrast to the default event underlying the CDS, the equity price underlying an option is more transparent, so if the equity price declines, it is contractually guaranteed to be reflected in the option value.”

Richard Budden

CLOs

European middle market maturing

US MM sector set to grow following BDC no-action letter

The middle market securitisation sector is only set to grow in the US, with relaxed regulatory constraints paving the way for BDCs to securitise their exposures. While the equivalent European sector is some way behind the US, the private debt market is now regarded as a “vanilla” asset class with institutional investor buy-in, suggesting middle-market securitisations will result after further industry maturation.

Ganesh Rajendra, managing partner at Integer Advisors, notes that, in Europe, while the securitisation of large cap loans is very developed and there is fairly strong activity in SME ABS, securitisations of middle market loans remains scarce. This could, however, be set to change.

He comments: “Currently, a number of European investment banks provide leverage to direct lending funds in the middle market and it may potentially make sense for a selected few to securitise those facilities via CLOs in order to de-risk their exposures. Such securitisations would be an interesting complement to any directly managed CLOs of middle-market loans.”

Contrastingly, the US has a well-developed sector for securitised middle market debt within the CLO space, which only looks set to grow, with BDCs now being able to securitise their middle market lending portfolios following the recent SEC no-action letter regarding risk retention. Additionally, this should potentially create a more diversified issuer base for middle-market CLOs in the US, although there has so far been little deal flow from BDCs to date.

In Europe, however, there “isn’t anything that has the legal personality of BDCs” says Rajendra, adding that there are, however, several listed closed-end funds managed by alternative lenders. In terms of whether there is an appetite to develop a European equivalent of the BDC structure, Rajendra says there is, “policy-maker interest to cultivate non-bank lending as an alternative financing channel, so you would think the answer is yes.”

He notes, however, that there are a number of hurdles to this becoming a reality, including legislative, operational and cultural issues and it is not clear if the impetus is quite there yet. Rajendra also outlines further challenges that have hampered the development of the asset class in Europe.

He says: “We think the main issue at the moment is the lack of collateral diversity and granularity. From what we can tell, lending by private credit funds in Europe tends to be concentrated, both in terms of jurisdiction – mainly UK, France and Germany - and borrower types,”

“These concentrations” he continues, “make such portfolios better suited to fund formats rather than originate-to-distribute securitisation. A separate issue is the lack of liquidity for these loans, compared at least to the larger cap leveraged loan market.”

Resolving this comes down to a range of factors, including the need for a push from direct lending funds to broaden their reach into the middle market borrower space in Europe. At the same time, there may be a need for an attitude shift among small-cap borrowers in Europe in terms of where they get their funding – typically banks are their first choice.

On private credit more broadly, Rajendra feels that it has grown in Europe to rival private equity in the last ten years, now being seen as a fairly vanilla product with buy-in from a range of institutional investors. This has in part been fuelled by a lengthy benign credit cycle and “uncorrelated returns versus public market comparables” he says.

How the sector will fare in a downturn is, however, a potential cause for concern. Rajendra comments: “We think the direct lender industry will face difficulties in any prolonged turn in the credit cycle, which will test lending standards, credit management skills and the uncorrelated return hypothesis, ultimately.”

He continues: “But, we feel the private credit theme is here to stay, with the strongest surviving any such shake-out. As with any young industry, the larger more established platforms with better operating infrastructure should be able to ride out any downturn.”

Regardless, he feels that it shouldn’t be long before securitisations begin to emerge from Europe backed by middle market credit and he suggests that that there will be a natural development as the institutional middle market credit system matures. Concurrently, other non-bank sources of lending complementing direct lending funds will emerge and growth in AUMs should continue absent any credit cycle shock.

A test for the sector will be when the first European securitisation of middle-market debt is completed and he notes that Bespoke Capital’s Alhambra deal is potentially the closest the market has seen so far to a middle market CLO in Europe. He concludes: “While this debut is certainly encouraging, fundamentally we believe middle market alternative lending in Europe will need to mature further before securitisation technology can become meaningful.”

Richard Budden

ABS

Junior demand

Credit enhancement concerns raised

Last year saw more single-B rated auto ABS paper issued in the US than in all previous years combined. Indeed, demand remains strong for junior notes, despite growing concerns over auto lending practices to less creditworthy borrowers.

Joseph Cioffi, partner and chair of the insolvency, creditors’ rights and financial products practice group at Davis & Gilbert, suggests that investors may be over-relying on credit enhancements. “Credit quality across the auto ABS market is declining – while borrower creditworthiness has been on a slight uptick, this is being neutralised by longer-term loans, which have become more prevalent. Credit enhancements continue to increase, but the question remains whether it’s enough. However, investors have been undeterred, as long as the yield and ratings are present,” he says.

He adds: “The market is yet to see any significant losses on subprime auto bonds because the credit enhancements have, so far, been sufficient to protect investors. And so, from an issuer’s perspective, as long as the demand continues, there’s little incentive to make any changes. This could also mean that lenders may not adjust practices, even when warranted.”

That the securitisation market appears to have largely ignored S&P’s downgrade of Honor Automobile Trust Securitization 2016-1’s class C notes last July (SCI 20 July 2018) and November (SCI 21 November 2018) is troubling, according to Cioffi. He points to the numerous credit extensions and loan modifications – which are understood to account for 20%-22% of the portfolio – used by Honor Finance to mask poor performance.

“Although many participants believe that Honor is a unique case – citing the deep subprime collateral and issues with management - it’s possible that similar practices are being undertaken elsewhere. The market needs further clarity to ensure that Honor is genuinely a one-off,” says Cioffi.

He continues: “The strength of Honor’s management was cited by S&P as a major factor in its ratings, but investors may have glossed over the fact that Honor’s management came from a company that was previously embroiled in accusations of misconduct. This demonstrates that investors can’t simply rely on a third-party opinion.”

As such, Cioffi suggests that the time is right for a 360-degree review in auto lending and ABS. Investors should ask the tough questions of auto lenders and auto lenders should step up diligence on auto dealer practices. A clearer picture is needed before the question of whether the yield is really enough to justify the risk can truly be answered.

“With an economic downturn on the horizon, will single-B rated auto bonds be able to withstand the stress?” he asks. “Maybe the yield is enough based on a macro view. But in any deal, the relationship among credit quality, credit enhancement and credit ratings needs to make sense – balance in that relationship is a key to success, especially in a market subject to such high demand, like auto ABS.”

Corinne Smith

Structured Finance

SCI Start the week - 4 February

A review of securitisation activity over the past seven days

Transaction of the week

Bank of Montreal has printed a US and Canadian leveraged loan capital relief trade dubbed Manitoulin. The US$92.5m 7.3-year financial guarantee pays Libor plus 12.75%.

The transaction has been rated as triple-A on the class A notes, single-A on the class B notes and triple-B on the class C notes. Further features include the presence of replenishment, a sequential amortisation structure and early termination of the protection.

The issuer's last capital relief trade was another leveraged loan deal that was issued in September 2018. Deutsche Bank followed in December 2018 with its own leveraged loan transaction (see SCI's CRT database).

Other deal-related news

• A pair of European RMBS transactions have been mandated, marking the first European securitisations of the year, barring CLOs (SCI 31 January). The first is a UK RMBS, dubbed Lanark 2019-1, from Clydesdale Bank, which has mandated BAML, BNP Paribas, Citi and Wells Fargo for the transaction, subject to market conditions. The second, from Italian lender Cassa di Risparmio di Bolzano, is a re-offer of the A1 tranche of its prime RMBS deal Fanes 2018.
• Greencoat Investments has launched a tender offer for the Business Mortgage Finance 4, 5, 6 and 7 CMBS (SCI 28 January). Fixed purchase prices for the bonds range from 0.50% to 101% per £1,000/€1,000/US$1,000 in principal amount of notes and an additional 0.50%-10% per £1,000/€1,000/US$1,000 is available as an early tender premium.
• CIFC has launched a UCITS fund - dubbed the CIFC Global Floating Rate Credit Fund - that will invest in liquid tranches of CLOs, with at least half of its funds allocated to triple-B rated bonds (SCI 30 January). The fund, which has launched with commitments of over £50m, is managed by Jay Huang and is targeting a return of 7%-8% per annum.
• Redwood Trust is participating in an investment fund created to acquire up to US$1bn of floating rate, light-renovation multifamily loans from Freddie Mac (SCI 30 January). After acquisitions have reached a specific threshold, the partnership may agree to include the related loans in a Freddie Mac-sponsored securitisation.
• The Holiday Inn Baltimore Inner Harbor loan, securitised in the JPMCC 2015-JP1 CMBS, turned 30-days delinquent in January. The hotel's license agreement with IHG expires in 2022. For more CMBS-related news, see SCI's CMBS loan events database.

Regulatory round-up

ESMA has submitted its final templates, raising hopes for an STS deal in 1H19. The revised set of draft regulatory implementing technical standards (disclosure RTS/ITS) under the Securitisation Regulation, which concern the details of a securitisation to be published by the originator, sponsor and Securitisation Special Purpose Entity (SSPE), as well as the relevant format and templates.

ESMA states it agrees with the European Commission's (EC) requests to amend its disclosure RTS/ITS and has expanded the ability for reporting entities to use the "No Data" options in the respective disclosure templates, in particular in the templates for asset-back commercial paper securitisation. In addition, ESMA has also adjusted the content of certain fields in the templates, where it considered that this could more appropriately address the EC's request. ESMA has also clarified the templates to be used to provide any inside information as well as information on significant events affecting the securitisation (under (f) and (g) of Article 7(1) of the Securitisation Regulation).

ESMA has also developed a set of Q&As based on stakeholder feedback and questions on the disclosure technical standards received by ESMA since 22 August 2018.

Data

Pricings

The US ABS market appears to be picking up now as a number of transactions have priced, with a fairly balanced mix of auto ABS and personal loan/credit card ABS. The CLO market in the US is now also picking up and in Europe CLOs are something of a highpoint, against a backdrop of very low issuance in the European ABS and RMBS space. Notably, the first CMBS transactions of the year have also now priced.

ABS: €5bn BPCE Master Home Loans 2019-1, US$786m CNH Equipment Trust 2019-A, US$1.25bn Discover Card Execution Note Trust 2019-1, £737m E-CARAT 10, US$700m Hertz Vehicle Financings 2019-1, US$218.03m Mosaic Solar Loan 2019-1, US$312.75m Oxford Finance Funding Trust 2019-1, US$171m Prosper Marketplace Issuance 2019-1,  US$543.48m Trillium Credit Card Trust 2019-1, US$815.22 Trillium Credit Card Trust 2019-2.

CLOs: €424.20m Carlyle Euro CLO 2019-1, $466.70m Carlyle Global Market Strategies 2015-5, US$732.75m CarVal CLO II, €515m Crosthwaite Park CLO, US$602m Neuberger Berman CLO 32, US$406.60m PPM Loan Management Company 2019-2, US$508.8m Sound Point CLO XXII.

CMBS: US$883.5m Benchmark 2019-B9, US$751.3m BANK 2019-BNK16.

RMBS: US$349m COLT 2019-1.

BWIC volume

NPLs

Nord LB acquisition dropped

Bank opts for owner recapitalisation

Nord LB’s owners have approved a plan to recapitalise the bank with funds from regional states and savings banks. The plan won the backing of its majority owner - the regional state of Lower Saxony, which has a 59% stake - last week, side-lining a rival offer by Cerberus and Centerbridge. The recapitalisation will further spur the bank’s shipping non-performing loan disposals, although it may fall foul of EU state aid rules.  

Sparkassen Finanzgruppe - a core shareholder of Nord LB via three regional savings banks associations - reached a unanimous agreement to inject up to €1.2bn of capital into Nord LB in order to reorganise and re-focus its activities. The state of Lower Saxony plans to inject additional capital of up to €1.5bn, among other measures, to increase the bank’s capital ratios, without using taxpayer money and therefore comply with state aid rules.

Nord LB also announced a parallel disposal of a €2.7bn distressed shipping portfolio. The transaction was preceded by a confidential bidding process, which was carried out separately and independently from the bidding process with Cerberus and Centerbridge. The German lender is under heavy pressure from European regulators to reduce its distressed shipping portfolio, which is part of a wider trend that led last year to a significant uplift in shipping NPL disposals (SCI 1 February). 

The joint private equity offer involved the acquisition of a stake of up to 49% in Nord LB. The bid, however, was contingent on existing shareholders taking care of the lender’s past liabilities and the state of Lower Saxony injecting money alongside the private equity investors. This is not the first time that Cerberus has applied the bank acquisition strategy, having acquired HSH Nordbank last year with JC Flowers for €1bn (SCI 1 March 2018).

Dierk Brandenburg, analyst at Scope, notes: “I suspect the owners were a bit underwhelmed by the idea that private equity puts in only €600m for almost half of the bank, while asking the other owners to shoulder all of the legacy risks and provide a public guarantee for funding the entity. The idea of combining private capital with state guarantees defeats the purpose, as the proposed structure wouldn’t have complied with state aid rules.”

He continues: “Keeping it in the family has other advantages for the State. The competing proposal by the German savings banks provides €1.2bn in cash, so twice as much as private equity, and provides the State with the strategic option to eventually merge Nord LB with other parts of the public banking sector. Yet a state aid investigation appears inevitable under both proposals.”

Attempts to merge Nord LB with Landesbank peer Helaba ended in December, when Helaba formally terminated the talks. 

The proposal is expected to further spur the German lender’s shipping NPL disposals. Moody’s notes that a “timely agreement on a recapitalisation of Nord LB will stabilise the bank and provide sufficient buffer to shield the bank from the remaining risks of its sizeable and impaired ship loans.”

Nord LB has €7.3bn distressed shipping loans with low coverage from loan-loss reserves of just above 43%, as of September 2018. In 2017, Nord LB announced that it would be reducing its NPL portfolio to less than €5bn by end-2019. The bank states that this run-off is now taking place “much more quickly and more comprehensively.”

The plans have yet to be approved by the European Commission and are pending approval by the state aid department. Moody’s concludes that other examples of state-aid investigations since the European Bank Recovery and Resolution Directive (BRRD) took effect might serve to support Nord LB's owners’ view that the recapitalisation does not contradict EU state-aid rules.

Stelios Papadopoulos

NPLs

Leviticus closed

Banco BPM completes NPL securitisation

Banco BPM has completed a €7.4bn (GBV) securitisation of secured and unsecured Italian non-performing loans dubbed Leviticus SPV. The transaction involves the transfer of the bank’s servicing platform to Credito Fondiario, which is part of a broader joint-venture trend in the Italian NPL market (SCI 14 December 2018).

“The trend is driven by the desire to monetise the platforms and high regulatory scrutiny that accompany their maintenance,” says David Bergman, executive director at Scope.

Rated by Scope and DBRS, the transaction comprises €1.44bn BBB/BBB class A notes, €221.5m unrated class B notes and €248.9m unrated class J notes.

The transfer of the servicing platform was the greatest rating challenge for Scope. “You get an interim period, where people move from BBPM to a joint venture controlled by Credito Fondiario - something that leads to lower recoveries, due to the lack of manpower that this period implies. However, we have taken this into account by factoring in the back-loaded recoveries.”

The transaction features a number of positive drivers, including the granularity of the portfolio, with the top-10 borrowers making up only 5% of the portfolio’s GBV. The credit enhancement for the senior note is 80.5%, which is unusually high compared to other NPL securitisations, given that the typical range is 70%-75%.

However, “legal proceedings haven’t started for two-thirds of the loans, meaning that the recoveries will be back-loaded in time and Scope has therefore assumed a weighted average recovery time of 6.7 years, which is 31 months longer than the business plan. Furthermore, around 12% of the assets are still under construction, making them harder to value,” notes Bergman.

Another issue is the lack of updated property valuations, although Scope compensates for this in its analysis by applying additional haircuts on those property valuations.

The most important recovery drivers of the portfolio are the proportions of secured and unsecured loans, respectively at 50.5% and 49.5% of gross book value. The secured portion has a significant proportion of high LTVs compared to other secured NPLs, reducing the recovery rate for the secured portion. For the unsecured loans, the weighted average seasoning is five years (on average, five years have passed since the loans have defaulted).

The portfolio is concentrated in the north of Italy (71.2%), with the rest in the centre (17.4%) and south (11.4%). Geographical distribution is positive for recovery timing because court proceedings in northern locations are more efficient relative to the Italian average.

Additionally, first-lien collateral is composed of residential (40.1%), land (15.6%), commercial (9.2%), industrial (5.1%) and other (26.1%) assets, including sold properties (3.9%). Further assets include a high portion of unfinished properties (11.9%).

Stelios Papadopoulos

Structured Finance

BoE, ESMA seal no-deal plan

Company hires and sector developments

No-deal agreement sealed

ESMA has agreed Memoranda of Understanding (MoUs) with the Bank of England (BoE) for the recognition of central counterparties (CCPs) and of the central securities depository (CSD) established in the United Kingdom (UK), that would take effect should the UK leave the European Union (EU) without a withdrawal agreement, the no-deal Brexit scenario.

US

Morgan Lewis has hired Paul St. Laurence to the role of partner in it its structured transactions practice. St. Laurence joins from Cleary Gottlieb and has a focus on securitisation, asset-based finance and other structured finance and derivatives products.

Structured Finance

Insurer boosts ILS capability

Sector developments and company hires

Acquisitions

Eldridge Industries has increased its investment in Maranon, now holding a majority ownership position. In addition to the equity investment, affiliates of Eldridge have made further commitments to Maranon’s platform, which will support Maranon’s ongoing strategic initiatives, including expanding the company’s underwriting and hold capability. Eldridge will acquire the additional stake from Maranon’s co-founder and Managing Director Tom Gregory, who has decided to transition to an advisory role.

Mitsui Sumitomo Insurance, a subsidiary of MS&AD Insurance Group Holdings is strengthening its ILS business and asset management business. As such, the firms has acquired 80% of limited partnership equity in Leadenhall Capital Partners (LCP) from MS Amlin Corporate Services Limited, a group company of MS Amlin and reorganized LCP into a direct subsidiary of the Company. Oversight of LCP will be transferred from the company’s international business to the financial services business, which has a strong business relationship with LCP.

Promotion

Schulte Roth & Zabel has promoted Anthony Lombardi to the role of special counsel in the structured finance and derivatives team. He is based out of the London office and was previously at DLA Piper.

Structured Finance

RMAC claim

Company hires and sector developments

The RMAC Securities No. 1 Series 2006-NS1, 2006-NS2, 2006-NS3, 2006-NS4 and 2007-NS1 issuers have confirmed that they have been validly served with a Part 8 claim form by Clifden, naming them, the corporate services provider and the share trustee as defendants (SCI 28 January). The defendants consider the claim to be both procedurally defective and without merit, and are pursuing an immediate strike out and/or summary dismissal of the claim.