Contents

Structured Finance

Quality control

Call for ESG data improvements

The lack of clear, unified standards continues to constrain the wider adoption of ESG securitisation in the EU. In order to fulfill investor demand for such product, both the quality and quantity of ESG data needs to improve, according to panelists at SCI’s recent ESG Securitisation Seminar.

Andrew Lennox, portfolio manager at Federated Hermes, pointed out that pricing doesn’t currently reflect the fact that a securitisation is ESG because the industry doesn’t trust the ESG labels. “We don’t trust the labels yet because there isn’t enough standardisation or enough data to base an opinion on. The demand for ESG product is there, but investors are having to make qualitative decisions, rather than quantitative ones. For instance, uncertainty remains about whether energy efficient mortgages will really perform through a cycle because we just don’t have the data yet to form a view.”

Around 220 million dwellings across the EU need renovating, which will require significant capital expenditure. “If the securitisation industry doesn’t agree on common standards and certification around, for example, the energy efficiency of these renovations, it is unlikely to be able to convince investors to make the right ESG investments. We need to make ESG-related policies more linear, from funding to the end consumer,” said Luca Bertalot, secretary general of the European Mortgage Federation (EMF).

The EMF last year launched an Energy Efficient Mortgage Label, with the aim of identifying energy efficient mortgages in lending institutions’ portfolios (SCI 11 March 2021). The label details a property’s year of construction, EPC rating and home improvement works that have been undertaken.

“What is missing from the label is renovation information. We need a system to capture the impact of renovation works to facilitate investor and lender due diligence,” Bertalot explained.

He continued: “One potential solution could be to create a new database as an official EU-wide source of reference. If this were to be legislated for, it could also help manage any liability and GDPR issues arising from the disclosure of such information.”

There are hundreds of ESG data providers and thousands of data sets. According to Richard Peterson, product head – credit data and analytics at FIS, his firm’s goal is to make this information accessible by unifying the data sets in a meaningful way and providing relevant insights and analysis.

“The greatest value from the data is derived from data transparency, ease of use, automated processes and benchmarking. There is so much ESG data that it is necessary to use artificial intelligence and machine learning tools to allow for aggregating and scoring company-specific data and other information that surrounds companies,” Peterson said.

He added: “It’s a balancing act between specific details and broader analysis, as more regulation and standardisation of reporting drives greater collection and utilisation of the data. These regulatory requirements will help push the ESG securitisation market forward and drive coalescence across the industry.”

As ESG data is a new concept for many securitisation players, it was suggested that such data should be approached from a relative value perspective, rather than an absolute value perspective. The idea being that there is an opportunity to build an ESG story and purpose; for example, to raise a fund in line with certain ESG considerations and thereby differentiating it.

When it comes to consuming ESG data, meanwhile, key requirements include the ability to track and monitor the data, and justify how it’s being used in the investment process. Such data should be incorporated as transparently as possible – where it comes from, any associated KPIs and how it is impacting investment decisions should all be disclosed, for example.

Overall, Peterson believes that as the market grows, the industry will see more standards emerge. “In the meantime, we need to be flexible regarding methodologies,” he remarked.

Nevertheless, Lennox argued that ESG should start to be priced in now. “What we consider to be ESG today won’t be the same tomorrow, but we can move the goal posts as the market develops. It will take time to get the necessary data, reporting and assets together to create an ESG securitisation market.”

He concluded: “The securitisation market is still predominantly funding the brown economy. The industry needs patience and to avoid the accusations of ESG washing that are rife in other asset classes. We have got time to get it right.”

Corinne Smith

CLOs

Keeping score

ESG CLO challenges highlighted

The role that CLOs can play in the sustainability agenda is becoming increasingly difficult to ignore, given the push towards Article 8 transactions under the SFDR (SCI 21 December 2021). Against this backdrop, a recent study undertaken by Scope Ratings analyses underlying borrower scores to highlight the challenges of labelling European CLOs as ESG products.

“The challenge is the large array of frameworks or methodologies that are being advertised without full disclosure of the processes. The most important point is to be transparent and objective,” notes Benjamin Bouchet, director of structured finance at Scope Ratings.

He continues: “It is all about the small print: are the scores comparable between different industries or are they relative to a specific industry? What are the inputs into the scores?”

In Scope’s recent report, entitled ‘European CLOs: navigating the ESG landscape’, the rating agency analysed 420 European CLOs from 60 asset managers that closed between 2013 and the beginning of 2022, scored the 575-plus issuers making up their collateral and checked the data quality for each CLO. Additional filters were applied to create a universe of 410 CLOs from 59 asset managers representing €166.15bn in assets. Each CLO’s scores, using Scope’s ESG Impact tool, were issuer-amount weighted and each manager’s scores were deal-amount weighted.

The Scope model assigns absolute principal adverse impact scores through an objective data-driven quantitative approach that it believes is transparent and comprehensive. Absolute scores - which run on a scale from zero (which is the lowest) to 10 (which is ranked as the highest) - allow for peer comparisons across industries and regions.

The data is derived from internationally recognised institutions and the model is based on 11 indicators: five environmental, four social and two governances. The model outputs for specific industries and countries appears to be more refined for environmental indicators than the others, probably due to better data quality regarding environmental factors.

Looking at five sectors with low ESG scores, 16 out of 113 issuers (accounting for 14.2% of the sample) exhibit a higher score than the overall average of 6.61. Conversely, within two sectors that have good ESG scores - which are accommodation, leisure and entertainment; and media - four out of 55 issuers (7.3%) exhibit a score that is lower than the average.

However, the correlation between the overall ESG score and the environmental score is extremely high at 0.98, according to Scope. It compares with 0.24 and 0.03 respectively for social and governance scores.

The social and governance scores marginally impact the absolute score, but they are not drivers. Meanwhile, the second most highly-rated asset manager has a higher environmental score but a lower aggregated score because of lower social and governance scores.

In terms of ESG scores and methodologies, corporates have historically been well covered, which is why CLOs are at present the most efficient product for any shifts in ESG from a securitisation perspective. Bouchet notes: “If we look at ESG-labelled CLOs from 2019, they did not benefit from any price differential. But as investors are becoming ESG savvy and more funds are becoming Article 8 or 9 under the SFDR, we’re starting to see a pricing premium for ESG CLOs compared to non-labelled CLOs.”

He continues: “CLOs now account for around a third of the ABS space. It is an asset class that is hard to ignore. The ESG CLO space is not new: most CLOs incorporate some ESG criteria in one way or another.”

Indeed, CLOs can play a significant role in the sustainability agenda by standardising ESG disclosures in the leveraged loan market. Bouchet concludes: “Regulators will be tougher on regulatory capital for non-ESG products; investors are pulling money from funds that are not advertising themselves as SFDR Article 8 and, as such, they either need a dedicated ESG team or a score that they can use. Asset managers issuing CLOs are also looking at the increasing pricing premium to issue ESG CLO products.”

Angela Sharda

ABS

Robotic revolution

QSR innovation continues to bolster WBS performance

Issuers of quick-service restaurant (QSR) whole business securitisations adopted a number of strategies to survive the Covid-19 pandemic. As trends towards off-premise dining and delivery continue to produce increased revenue, these strategies are expected to continue supporting performance across the segment.

US QSR WBS issuance last year increased by 88% from 2019 and by a total 300% compared to the all-round low issuance seen across sectors in 2020. Furthermore, none of the 27 QSR WBS issuers KBRA rates experienced a negative rating migration throughout the pandemic.

Indeed, QSR WBS performance has significantly improved - following a small dip at the start of the pandemic - and now exceeds pre-pandemic figures. “Prior to the start of the pandemic, a meaningful portion of QSR sales were from off-premise dining, which became the primary form of dining for most of us during the pandemic lockdowns. QSRs really leaned into that trend,” explains Maxim Berger, director in consumer ABS at KBRA.

QSRs are expected to continue leveraging strategies relied upon for success throughout the pandemic and ramp up technological innovation. “That included focusing on things they’ve already done – like ramping up drive-thru options, partnering closer with third-party delivery companies like DoorDash or Uber Eats, and incorporating them into their mobile ordering,” understands Berger. “Bolstering and improving the mobile ordering capabilities is expected to help partially offset some of the back-of-house pressures that they were feeling.”

Robotics have also been increasingly implemented across QSRs during the pandemic, as a method of minimising labour costs and enabling proper social distancing in kitchens and delivery. The Miso Robotics ‘Flippy 2’ robot, for instance, is now being introduced in 100 regional QSR restaurants owned by WhiteCastle.

“Generally, the challenges the QSR industry is facing are similar to what many others in the restaurant industry are facing, and that is back-of-house pressure - primarily from labour shortages,” explains Berger. “Alleviating some of those labour shortages with more mobile ordering, less front-of-house staff or leveraging some automation from robotics and driverless delivery is how we think they’re going to try to overcome some of these back-of-house challenges.”

Another issue is supply chain, states KBRA md Xilun Chen. “With everything going on in the world, supply chain is going to be much more difficult to manage and prices are going to be higher for items including food, plastic utensils and napkins. Only a portion of these elevated costs can be passed through to the customers, as most of these quick service restaurants are somewhat price-sensitive.”

He also expects food consumption to see some shifts going forward, with the post-pandemic return to in-person dining challenged by labour shortages. “From a growth perspective, it’s very hard to say where this growth is going to come from. Overall, I think there’s probably going to be more food consumption, but it is difficult to say in terms of which restaurant segment is going be positively impacted by that.”

The strategies adopted by QSRs during the pandemic are expected to continue supporting performance across the segment. “Broadly, we expect QSR WBS spreads to continue to price inside of other WBS sectors,” comments Berger.

Indeed, as trends towards off-premise dining and delivery continue to produce increased revenue, KBRA suggests that these sales could enhance cashflow to ABS trusts. “Every WBS that is franchise-based had included royalty cashflows, so higher sales from off-premise consumption will likely imply higher total sales for the system,” Chen concludes. “As most royalty rates are a fixed percentage of sales, which most of these transactions have, the percentage will be off of a higher revenue base. That will likely mean more cashflows will be available to service the debt and therefore the coverage ratios are likely to improve.”

Claudia Lewis

ABS

Guarantee on tap

WBS liquidity facility replaced

Assured Guaranty UK (AGUK) has issued a £170m five-year debt service reserve (DSR) guarantee to benefit Yorkshire Water Services, part of the Yorkshire Water group. The guarantee was structured to fit within Yorkshire Water Services’ existing whole business securitisation and comes as banks increasingly retreat from providing securitisation liquidity facilities.

The securitisation requires a debt service facility to be in place, in order to maintain the senior ratings of the class A and class B notes. The AGUK DSR guarantee replaces the existing liquidity facility provided by banks and could be drawn upon in the event of a shortfall in certain specified amounts, including interest payments on the class A and B notes.

“The number of banks willing to provide liquidity facilities is shrinking, due to changing risk capital requirements. Bank facilities only last for 364 days and renegotiating a facility is typically a cumbersome administrative process,” explains Suparna Dar, director at Assured Guaranty.

She continues: “In contrast, Yorkshire Water can, with our consent, roll our DSR guarantee over every year based on an agreed process and a simple set of documents. That way, the guarantee is evergreen for the life of the transaction and the amount of the facility can vary over time.”

Dar notes that AGUK already wrapped the Yorkshire Water bonds, so the firm understands the securitisation structure and the water and sewerage industry well. The DSR guarantee sits neatly within the existing financial structure, providing the required liquidity for senior debt holders and ensuring Yorkshire Water maintains its senior debt ratings.

AGUK previously executed a £130m DSR guarantee for Welsh Water in 2019 (SCI 1 April 2019). Dar suggests that such a guarantee is also applicable to the transactions issued by other regulated entities, such as airports and ports.

AGUK is rated double-A by S&P and A1 by Moody’s, in each case, with a stable outlook.

Corinne Smith

ABS

Cautious optimism

European ABS/MBS market update

Following a clear pick-up in activity last week, the European and UK primary ABS/MBS markets have carried over that dynamism into this week. Optimism is, it seems, back on the cards for now.

“Well, I think things are much more positive,” states one European ABS/MBS trader. “We have seen a big turnaround in the market, where a lot of issuers had their deals on ice. It is very likely we will have a very busy pipeline this month.”

Away from two retained deals, the week kicked off with the latest Harmony French Prime RMBS deal pricing on Wednesday. The €552m A tranche was a solid 2x oversubscribed, whereas the B notes were 5.1x oversubscribed. Bumper demand for the latter was reflected in a final spread landing at three-month Euribor plus 125bp in from IPTs of low-to-mid 100s.

In the UK, Oodle Financial Services attracted excellent investor demand for its auto ABS Dowson 2022-1. The triple-As drove in from IPTs of SONIA plus 100-110bp to print at plus 92bp. The rest of the capital stack achieved similar results, with the B-D notes landing at plus 175bp, plus 225bp and plus 270bp respectively – with all coming in by circa 25bp from IPTs. The mezzanine tranches all showed strong levels of demand and were each oversubscribed by more than 4x.

“We saw very good demand for Dowson,” notes the trader. “It is a very positive sign, particularly for what is usually a niche product in sterling.”

Meanwhile, Italian consumer ABS Quarzo 2022 priced earlier today. The solely offered €528m class As tightened from IPTs of 75-80 to price at three-month Euribor plus 70bp, 1.6x oversubscribed.

Next week looks set to be even busier with the five deals in the pipeline all slated to price. Morgan Stanley has already opened books on Irish RMBS Primrose Residential 2022-1 – with IPT’s for the senior notes indicated in the one-month Euribor plus 125bp area.

Following last week’s Italian CMBS Cassia 2022-1, Goldman Sachs announced a mixed Dutch/German life science park CMBS. The full capital stack is on offer, ranging from triple-A seniors down to a triple-B rated D tranche.

Filling out the pipeline are: RNHB, with a new Dutch BTL transaction from their Dutch Property Finance programme; NewDay’s new credit card ABS, which will offer the full capital stack, though a portion of the double-A US$ tranche has already been pre-placed; and UK auto ABS Orbita Funding 2022-1. For more on all of the above primary deals, see SCI’s Euro ABS/MBS Deal Tracker.

The secondary market also reflects the regained demand experienced in the primary market, the trader reports. “I think we are pretty much seeing much of the same, where investors are clearly looking for opportunities to deploy their cash.”

Looking ahead the trader warns against early celebration, however. “Whilst there is a positive mood, it is still a case of cautious optimism,” he concludes. “There is still quite a bit of way to go, but the early signs in both secondary and primary markets are definitely positive. The market was temporarily closed and now a window has opened. Issuers need to come to market.”

Vincent Nadeau

Structured Finance

SCI Start the Week - 28 March

A review of SCI's latest content

NPL awards open
The submissions period has opened for SCI’s inaugural NPL Securitisation Awards, covering the European non-performing loan securitisation market. The qualifying period is the 12 months to 31 March 2022.
Nominations should be received by 3 May. Winners will be announced at SCI’s NPL Securitisation Seminar, in Milan on 27 June.
Click here for more information on the award categories and pitching process.

Last week's news and analysis
Inequitable frameworks
Data analyses demonstrate punitive ABS treatment
Landmark SRT launched
mBank debuts polish synthetic ABS
Lumpy SOFR
New Libor bill fails to clear up potential Libor versus SOFR mismatch
Ratings cap?
Risks in BNPL-backed securitisations weighed
Risk transfer reboot
CRT pipeline back on track
SME SRT disclosed
Last EFSI SRT revealed
STACR three
Freddie Mac completes Q1 CRT borrowing
Thoughtful approach
Olivier Renault at Pemberton Asset Management answers SCI's questions
Window of opportunity
European ABS/MBS market update

For all of last week’s stories including ‘Market moves’ and ‘Risk transfer round-up’ click here.

SCI CLO Markets
CLO Markets provides deal-focused information on the global primary and secondary CLO markets. It offers intra-day updates and searchable deal databases alongside BWIC pricing and commentary. Please email Jamie Harper at SCI for more information or to set up a free trial here.

Recent Premium research to download
MDB CRT challenges - March 2022
A number of challenges continue to constrain multilateral development bank capital relief trade issuance. This Premium Content article investigates whether these obstacles can be overcome.
The rise of the ESG advisor - March 2022
ESG advisors are gaining traction in the securitisation market, as sustainability becomes an ever-more import consideration for investors and issuers. This Premium Content article investigates what the role entails.
CLO Control Equity - March 2022
CLO equity is back in vogue and is attracting attention for all the right reasons. As this Premium Content article suggests, for suitably prepared investors, taking a majority position can increase the benefits still further.
Stablecoin and securitisation - February 2022
Appropriate regulation of digital payment could pave the way for the issuance of securitisations in stablecoins. However, this Premium Content article argues that further standardisation across the blockchain ecosystem is needed for the technology to reach a critical mass.
US auto CLNs - February 2022
Santander’s recent auto CRT echoed those previously issued by JPMorgan Chase. This Premium Content article examines the similarities and differences between the transactions.

SCI Events calendar: 2022
SCI’s 6th Annual Risk Transfer & Synthetics Seminar
27 April 2022, New York

SCI’s 4th Annual NPL Securitisation Seminar
27 June 2022, Milan

SCI’s 8th Annual Capital Relief Trades Seminar
20 October 2022, London

SCI’s 3rd Annual Middle Market CLO Seminar
November 2022, New York

Capital Relief Trades

Call option pending?

APAC SRT could be called this year

Credit Suisse has a scheduled call date this year for a synthetic securitisation that is fully backed by Asia Pacific corporate loans. Capital relief trades backed entirely by Asia Pacific exposures are extremely rare (SCI 11 September 2020).

The transaction was finalized in 2019 and is a bilateral and collateralized CDS transaction, so it’s not listed on an exchange. Further features include a two-year replenishment period. The deal is backed by both drawn and undrawn exposures.

Historically, Asia Pacific banking systems have been well capitalised and generally profitable, so there has been no significant push - whether from shareholders or regulators - towards deleveraging.

Indeed, banks in Australia, Hong Kong, Japan, and Singapore have strengthened their capital position over the 2016-2019 period, with the average Tier one capital ratio rising by 1.4 percentage points between 2016 and 2018. These are systems dominated by banks that use IRB models and are thus likely to report higher RWAs because of the Basel 4 implementation.

Yet higher RWAs are costly, so banks can slow their growth to manage capital consumption. As risk appetite, balance sheets and RWAs grow over time, balance sheet optimisation becomes crucial and synthetic securitisations begin to look more promising.

Stelios Papadopoulos 

Structured Finance

How can I manage a thriving CLO platform?

Dana Carey, cio, MidOcean Credit Partners, explains that managing a successful CLO platform is like assembling a jigsaw puzzle – there are many complex pieces that need to fit together for it to create an efficient, effective and cohesive final product.

In a universe of more than 100 CLO managers, since the financial crisis, few have done much to differentiate themselves.  Some managers have tried, but such ambitions have led to problematic outcomes. Take for example those who have reached for spread, creating alpha for the equity, but leaving liability investors feeling at odds with the manager. And then there’s those with conviction who sought after lower diversity, but were ultimately left reeling with issues, notably with respect to the oil and gas crisis.

Given this, and, as a more general matter, the portfolio overlap and similar approaches to credit amongst CLO managers, you learn that, for the most part, CLO managers seek to blend in rather than stand out. So, with this in mind, one must ask: as a manager, how can you differentiate yourself in a meaningful but positive way while creating value and efficiency for all parties?

This synchrony begins with ensuring the right team is in place. At MidOcean, we are heavily focused on investing in our people: a deep and unified bench is critical to building differentiated portfolios and managing risk with a ‘win by not losing mentality.’ Everyone from senior management, portfolio managers, research, trading, operations, and investor relations must work together cohesively towards a shared goal. In today’s challenging markets, a highly structured approach is also required to ensure a CLO manager can yield efficient and repeatable results for investors, whether when playing offense or defense.  To that end, our research team is platform-based and organized by sector, and our Investment Committee oversees all strategies, and votes on every name that comes on the platform, with unanimous vote required for approval.  

The more the market knows about a manager, the better. We strive to be an open book to our lenders, and to have members of our team actively engaged in open dialogue with CLO market participants broadly and institutional investors specifically, as evidenced by our hiring of Jamil Nathoo, former Goldman Sachs Head of CLO and ABS Syndicate, earlier this year.  We believe investors must know how a CLO manager operates – in other words, a manager’s take on the market, current areas of concern, current areas of opportunities, outlook. The more investors know about a manager, the more they will know what they can expect from that manager, and that efficiency will inevitably lead to programmatic investing and issuing. Building and fostering key relationships – whether with investors or with banks or counterparties – bring enormous synergies and ease of access to loans and opportunities.

It is essential that a manager have conviction, be prepared, and also, importantly, have the support of a solid and trusted platform. After all, it’s what we know our investors expect from us and what we look for in other CLO managers as a tranche investor ourselves. As we prepare our firm for future growth, self-reflection of our structure as a manager is crucial to unlock the full potential of our platform.

When I joined MidOcean as CIO from Apollo in 2019 it was with the goal of leveraging my over 20 years of experience in credit markets to successfully scale the credit platform and elevate the existing CLO franchise to best position it for future growth. Since then, we’ve continued to expand our bench of talent, as previously noted, and late last year formed a strategic partnership with Bennett Goodman’s Hunter Point Capital to bolster our balance sheet and focus on re-investing the firm. Access to capital unlocking ease and independence in the market, coupled with a strong team build out and investor transparency, are key to CLO manager efficiency and driving future success. I am pleased to be part of a team that values these important pieces that make up the puzzle that defines an efficient and successful CLO manager. 

Structured Finance

Sixth Street establishes structured products business

Sector developments and company hires

Sixth Street has announced the formation of a dedicated structured products business to further enhance its capabilities as a strategic capital partner and solutions provider at scale. Sixth Street structured products builds upon the firm’s existing expertise and will focus on asset and platform investing and origination across finance markets, including commercial and residential mortgages, renewables and energy finance, consumer asset classes, infrastructure debt, transportation and commercial equipment. Michael Dryden, an experienced leader of one of the largest structured finance businesses in financial services, has joined Sixth Street as a partner to lead the expansion. Dryden will be based in New York. Prior to joining Sixth Street, he was global head of securitised products finance at Credit Suisse.

In other news…

EMEA

Crestbridge has appointed a new director of corporate and capital markets as it works to enhance its corporate services business. Luke Hamill will take on the new role in the firm’s London office, and follows the hire of new group head, Martin Lambert, earlier this year. In the new role, Hamill will be responsible for furthering the Crestbridge capital markets proposition. With more than twenty years of experience working in international real estate, Hamill joins Crestbridge from the Abu Dhabi Investment Authority, where he spent six years managing US$10bn of debt capital markets activity across Europe and Asia.

Moody’s has appointed Annabel Schaafsma as global head of the structured finance ratings group, effective from 19 April. Currently md and global head of methodology development at the rating agency, Schaafsma brings over two decades of credit expertise in structured finance to her new role. As well as Moody’s, she has worked at Standard Chartered, Credit Suisse and SG Warburg. Schaafsma replaces Jim Ahern, who will transition to a new role after more than five years of leading the group.

North America

MidOcean Partners has announced that Joseph Rotondo, senior portfolio manager for Invesco’s Global Senior Loan group, will be joining the firm as senior portfolio manager for MidOcean Credit’s CLO business. As senior portfolio manager, Rotondo will be responsible for portfolio management of the firm’s existing CLOs as well as new transactions MidOcean expects to issue as it continues to build out its CLO platform. He will also serve as a member of the firm’s Investment Committee. Based in New York, Rotondo will report to Dana Carey, chief investment officer of MidOcean Credit.

Structured Finance

First Eagle Investments to acquire Napier Park Global Capital

Sector developments and company hires

First Eagle Investments has announced its agreement to acquire leading alternative credit manager, Napier Park Global. The deal is expected to close within the next few months, and will see Napier Park retain its investment and operating autonomy. At the close of 2021, First Eagle had a reported US$110.5bn in assets under management, with this acquisition set to increase further the investment firm’s capabilities across the credit market, and improve its exposure to both US and European credit. On top of acquiring Napier Park’s US$18.7bn in assets under management, First Eagle will also increase the scope of its CLO business by expanding into European CLO management. Napier Park will continue to be led by respective ceo and cio, Jim O’brien and Jon Dorfman, with other key members of the team also continuing on.

In other news.....

EMEA

Marno Jooste has been promoted to head of structured credit, within the private debt origination team at Pension Insurance Corporation. Based in London, he was previously senior debt origination manager at the organisation, which he joined in June 2017. Before that, he worked at TradeRisks, Credit Suisse and KPMG.

North America

Post Advisory Group has completed the capital raise for the Post CLO Equity Master Fund, after receiving great interest and oversubscription. The fund was able to surpass its original US$120m target and raised US$146m from investors. The fund will be used to invest capital in the equity of several Post-managed CLO transactions, as the firm works to expand its suite of high yield and senior loan products. The fund was committed to by the firm and its employees, corporate pension funds, family offices, and individuals, with Mercer’s private debt business operating as an anchor investor and strategic partner in the completion of the fund.

Structured Finance

BNP Paribas Asset Management acquires majority stake in Dynamic Credit Group

Sector developments and company hires

BNP Paribas Asset Management has announced the completion of its acquisition of a majority stake in Dutch asset manager, Dynamic Credit Group (DCG). The acquisition marks an important step in BNPP AM’s strategic plan to expand its investment business, and particularly its private debt platform. The firm hopes the integration of DCG into BNPP AM teams will enhance its private debt services, help ramp up DCG’s business across Europe and Asia, and increase its global capacity to procure personal and SME loans for its Diversified Loan Fund.

In other news…

North America

Pretium has recruited a new md and portfolio manager as it works to expand and enrich relationships across the leveraged loan and CLO investor markets. Christina O’Hearn joins the firm’s leveraged loan and CLO team from RBC Capital Markets, where she served as director of loan sales, and will report to the team’s senior md and head, Roberta Goss. On top of her portfolio management responsibilities, O’Hearn will focus on building upon existing and diversifying Pretium’s relationships across the leveraged loan and CLO investor markets.