Contents

Structured Finance

Split opinion

Recession considerations discussed

The jury is still out on the likely impact of next year’s forecast recession on the securitisation market. However, panellists at S&P’s European Securitisation Conference earlier this month did concur that the situation is likely to get worse for the sector before it gets better.

While the forecast for the European securitisation market appears somewhat bleak, the majority of panellists at the S&P conference considered the primary solution to simply be time, expressing hope in the measures introduced to make the sector more robust following the financial crisis. For this reason, structured finance products are expected to fare better than other asset classes through the forthcoming financial strife, due to the heftier regulatory protections onboarded after 2009.

However, against the backdrop of the looming energy crisis, panellists attested to a return to uncertainty across securitisation after the recent August ‘holiday’ period. Speakers also confirmed that conditions in terms of issuance and spreads are likely to remain tough for the rest of the year, with many not expecting normalisation until early 2023.

Across financial markets, predictions for how the recession will impact various asset types remains unclear, as consumer patterns and behaviours are likely to remain unpredictable in the wake of the pandemic. While some panellists at the S&P conference did appear hopeful for some form of recovery around Q2 next year, others called for a lowering of the barriers to entry to securitisation to ease the blow of the recession on the market.

Although the current slow ABS issuance is expected to pick up, one speaker did question the likelihood of a greater shift towards club deal formats in the future. Elsewhere in the market - namely for CLOs - the outlook remains more positive, as panellists considered the asset class to be more adaptable and pointed to its resilience throughout the pandemic.

A default rate of 3% is forecast for European CLOs next year, which compares to a peak of 6% seen through the pandemic, with no significant downgrades. Panellists remain relatively optimistic for the CLO market, holding faith in managers’ ability to ‘manage their way out’ of difficulty over the next 12 months.

For RMBS, where significant growth in mortgage lending was seen through the pandemic, panellists held uncertain expectations for the space for 2023. However, one speaker did confirm their RMBS business remained on track for 2022 and for next year as well, with the objective of issuing one or two deals per year.

Additionally, it was mooted that more mortgage forgiveness - and therefore more delinquencies – may emerge, rather than credit card forgiveness, just as was seen in 2009.

ESG issues appeared to be the foremost concern for RMBS, given that only one RMBS has hit the market citing both CO2 emissions and EPC ratings data. But the lack of and limited collection of data for sustainable RMBS, especially in connection with CO2 emissions, is anticipated to become less of a priority as a recession looms. Indeed, speakers warned of the disruption a recession could cause for securitisation and beyond in the race towards global 2030 and 2050 net-zero targets.

Nevertheless, ESG is still expected to remain on the radars of issuers and investors alike heading into 2023. According to one panellist, clients do still appear to be interested in ESG - despite growing wider economic concerns - and noted that they still receive daily enquiries for Article 8 and Article 9 deals.

Another panellist even accredited the increased regulation and transparency introduced by rising ESG demand in the sector in recent years with the potential ability to serve securitisation well through the forthcoming harsh macroeconomic backdrop by improving liquidity. Another, however, criticised the low barriers to entry for sustainable-labelled securitisations in Europe, and went on to predict that further updates will likely fall in line with use-of-proceeds approaches espoused by ICMA’s green bond principals update earlier this year (SCI 29 June).

Regarding ESG more broadly, the panel considered the main issue with ESG to not be the actual meeting or striving towards environmental, social and governance targets, but rather the failing to track and report on specifically social issues.

Claudia Lewis

Asset-Backed Finance

Bright spots

IRA set to boost solar ABS origination

The US solar ABS market is poised for growth, following the passage of the Inflation Reduction Act (IRA) last month. In particular, the extension and expansion of the investment tax credit (ITC) is set to encourage consumer engagement with solar panels.

“Origination continues to be strong and we will continue to see ABS transactions for the rest of the year - it’s one of the bright spots for esoteric ABS. In this sector, as originations have continued, so has capital markets activity and I do expect to see that relationship continuing,” explains Yezdan Badrakhan, head of esoteric ABS at MUFG.

The IRA has not only extended the ITC for 11 years through 2034, but also increased the credit to 30% from 26%. The higher 30% credit will be retroactively applied to anyone whose PV system has been placed in service since the beginning of 2022.

Furthermore, the act extends the 30% ITC to stand-alone energy storage, which was previously not eligible. Homeowners who retrofit a battery to a solar PV system can now take advantage of the credit, as well as those who install a battery as stand-alone energy storage without a solar system.

The ITC can increase to 50% for some projects in the residential solar lease and solar commercial and industrial (C&I) sectors, depending on the type of organisation, domestic product use and project location.

The expansion of the ITC renders owning a solar PV system more affordable, provides a meaningful potential source of repayment for residential solar loans and will continue to encourage consumer adoption of solar energy and solar loan originations. Badrakhan confirms: “We are seeing the consumer market engaging in solar panels or using solar panels and I think that is evident in the conversations we are having with solar issuance parties.”

Moreover, the recent rise in energy prices has reinforced the solar loan value proposition for many borrowers. But Badrakhan explains that solar panels are attractive even in environments of lower energy prices.

He claims: “There will continue to be strong reasons to look towards adding solar panels – energy prices are elevated, but in periods of lower energy prices, these solar originators were still originating.”

Some market participants are optimising their existing warehouses in the solar loan and lease space, while others are looking to put into place new warehouses. Additionally, Badrakhan confirms that a few players are seeking to become more prominent in the ABS space.

Solar loan ABS annualised losses have trended below 2%, while delinquency rates have been below 1%, according to KBRA’s Solar Loan Index. While future performance may be impacted by macroeconomic trends, such as inflation, interest rates and unemployment, the rating agency believes that the sector should perform better relative to other forms of consumer credit, given the asset’s inherent value proposition.

Badrakhan concludes: “The sector has had a solid footing in the market and I view it as a more permanent asset class within esoteric ABS.”

Angela Sharda

ABS

Primary stutters as secondary swamped

European ABS/MBS market update

In what has been a week of political and financial turmoil since last Friday’s UK mini-budget, two deals were pulled, though two more made it over the line. At the same time, the secondary market was flooded with BWICs, driving some hefty volumes.

“This week has been all the about the secondary market,” notes one European ABS/MBS trader. “It has been a long while since we’ve seen so many BWICs – both in euros and sterling. The numbers were amazing, with around €500m of notional value offered, but bonds traded and levels on euro prime assets were decent, so clearly sellers would not sell at any price.”

In the primary market, despite the wider turmoil, the week kicked off with some success as Bavarian Sky German Auto Leases 7 priced on Tuesday. BMW Bank was able to attract strong demand, achieving a €180m upsize and setting a 6bp tighter spread level than the Red & Black Germany 9 transaction two weeks before. The senior tranche landed at one-month Euribor plus 50bp, with a 2x coverage ratio. The final book ultimately reached a substantial €1.56bn.

“The deal performed pretty well. With the senior notes pricing at 50bp - a bit inside the previous German auto ABS - I think they will be happy with the overall execution,” says the trader.

However, in the UK, the choppy market conditions sent issuers running for the exit with two deals ending up being derailed mid-week. First, Yorkshire Building Society decided not to proceed with the public placement of Brass No. 11 and instead fully retain the deal, citing exceptional volatility in the broader sterling markets. At the same time, the decision was taken to retain non-conforming RMBS Parkmore Point 2022-1, which had been sitting in the pipeline for nearly a month.

Despite no real let-up in volatility, Santander pressed on with its latest full-stack German Consumer ABS - SC Germany Consumer 2022-1 and successfully priced it today. Unsurprisingly, spreads were a little wider than initial price talk released earlier in the week, but coverage levels were satisfactory given the environment and €1bn deal size.

Naturally, there is growing uncertainty around whether the broader UK context and market will now impact the entire European primary ABS/MBS markets. “The UK market is clearly not a market where you want to be looking for funding. It is way too volatile right now and it will surely have an impact on other jurisdictions,” states the trader.

Nevertheless, one deal has popped into the pipeline, with CA-CIB announcing the remarketing of the previously retained Ginkgo Auto Loans 2022 class A notes. Pricing is expected during the week commencing 10 October.

For more on all of the above deals, see SCI’s Euro ABS/MBS Deal Tracker.

Vincent Nadeau

Structured Finance

SCI In Conversation podcast is now live!

We discuss the hottest topics in securitisation today...

In this inaugural episode of the SCI In Conversation podcast, Angela Sharda chats to KBRA European research head Gordon Kerr about a European securitisation investor survey the rating agency undertook in June and the implications of the findings today. We also discuss a couple of new SCI Premium Content articles, one of which tracks the evolution of the STS synthetic securitisation sector. The other Premium Content article provides an update on the flourishing US CLO ETF market.

This podcast can be accessed here, as well as wherever you usually get your podcasts, including Spotify and iTunes (just search for ‘SCI In Conversation’).

Structured Finance

SCI Start the Week - 26 September

A review of SCI's latest content

Last week's news and analysis
CRT wave continues
Goldman Sachs prices leveraged loan CRT
Investment slowdown
EIF expected to reduce SRT investments this year
Legitimate questions
STS synthetics adoption discussed
Singular CRT
One-off entry into CRT from PacWest
STACR six priced
Sixth low-LTV STACR of 2022 priced

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 David McGuinness at SCI for more information or to set up a free trial here.

Recent premium research to download
STS synthetic securitisation - September 2022
The adoption of STS synthetic securitisation has helped legitimise the capital relief trades market. However, this Premium Content article outlines how the EBA’s most recent consultations could prove challenging.
Japanese SRT prospects - July 2022
Japanese banks have historically been well-capitalised, but implementation of the Basel output floors could change this. Against this backdrop, this Premium Content article investigates the prospects for capital relief trade issuance in the jurisdiction.
Australian securitisation dynamics - July 2022
In contrast to Europe and the UK, the Australian securitisation market is continuing to see healthy issuance activity, despite the country dealing with the same inflation and rates pressures as the rest of the world. This Premium Content article investigates why it’s always sunny Down Under.
Container and Railcar ABS - June 2022
Global supply chain issues could continue to support US container and railcar ABS. However, as this Premium Content article shows, both markets are facing challenges on other fronts.
CLO Migration - June 2022
The switch from the Cayman Islands to alternative domiciles, following the European Commission’s listing of the jurisdiction on the EU AML list, appears to have been painless for most CLOs. This Premium Content article investigates.

SCI events calendar: 2022
SCI’s 8th Annual Capital Relief Trades Seminar
20 October 2022, London
SCI’s 3rd Annual Middle Market CLO Seminar
15 November 2022, New York

Capital Relief Trades

Golden Arch

Arch sells second MILN of 2022 at wide prints

Arch has printed Bellemeade Re 2022-02, worth $201m, its second mortgage insurance-linked note (MILN) of the year.

This is only the fourth deal in this sector in 2022 as wider spreads have deterred issuers. Essent priced Radnor 2022-01 earlier this month, but that was the first MILN seen since April.

Bellemeade 2022-01 is noticeably on the small size - indeed it is the smallest trade ever priced in the MLN market since it began in July 2015.

The trade consists of four tranches. The $52.86m M-1A (rated Baa3) notes yield SOFR plus 400bp, the $105m M-1B (rated Ba3) notes yield SOFR plus 750bp, the $21.57m M-2 (rated B3) notes yield SOFR plus 925bp and the $21.57m B-1 notes yield SOFR plus 1200bp.

The width of the yields is also striking. For example, in January’s trade, worth $282m, the M-1A notes paid SOFR plus 175bp, the M-1Bs paid SOFR plus 215bp while the B-1s paid SOFR plus 550bp. These yields offered by the latest note are more than twice as generous.

The notes have a 10 year term and will amortise alongside the mortgage loans and covered insurance policies.

The covered pool of insured mortgage loans consists of 152,768 fully amortizing first-lien fixed- and variable-rate mortgages.

Arch has been unavailable for comment.

Simon Boughey

Capital Relief Trades

Risk transfer round up-27 September

CRT sector developments and deal news

Standard Chartered is believed to be readying another capital relief trade of US and European corporate loans from the Chakra programme. The last Chakra deal closed in December last year (SCI 15 December 2021).

Stelios Papadopoulos

Capital Relief Trades

New BMO CRT asset

BMO brings capital call facility CRT

Bank of Montreal (BMO) has added capital call facilities to its broad CRT effort in a new deal which closed yesterday (September 29), say sources close to the issue.

The new trade is dubbed Killarney Series 1, and is worth $100m of party-paid floating rate notes, they add.

It is issued through Manitoulin - BMO’s SPV designed for CRT issuance.

The tranche thickness and spread on offer to buyers are not disclosed. Bank of Montreal declined to comment.

BMO has become the leading light of the CRT market in North America over the last few years and now has no less than five CRT programmes in place.

The Algonquin platform securitizes SME corporate loans from US and Canadian borrowers, while Muskoka - the sister programme to Algonquin - securitizes larger corporate loans.

Boreal deals with Canadian commercial real estate loans, and remains the only Canadian dollar denominated programme in the market, while Sauble handles leveraged loans. The bank has now done a total of seven deals in 2022.

Moreover, say sources, another programme is expected to see the light of day before the end of the year.

Capital call facilities have become a popular asset class to meet the CRT treatment this year, with WAB bringing a deal in July 

The assets represent loans to private equity funds which prefer to use these lines rather than funds advanced by limited partners as it improves the IRR.

Simon Boughey

Capital Relief Trades

Spanish SRT launched

Magdalena six prices wider

Santander has finalized the sixth synthetic securitisation of Spanish SMEs from the Magdalena programme. The transaction was priced wider compared to the last capital relief trade from the programme.

The trade features a €223.5m tranche and was priced at three-month Euribor plus 10.65%. The maturity ends in April 2038. Credit enhancement is present in the form of a retained first loss tranche. The deal was initially approximately 50% smaller but after non-binding bids and strong demand, the portfolio was upsized from €2bn to €3.38bn. 

Santander carried out a private placement process with over ten European accounts aiming for a club deal. The deal was eventually priced and allocated to five final investors. The fifth Magdalena deal priced at three month Euribor plus 8.5% (see SCI’s capital relief trades database).

The Magdalena programme securitises Spanish SME loans. The first Magdalena trade broke new ground since it was the first synthetic securitisation to be registered on the Mercado Alternativo de Renta Fija (MARF), following amendments to Spanish Securitisation law (SCI 1 June 2017). The amendments allow Spanish securitisation funds to securitise loans and credit rights via derivative instruments.

Stelios Papadopoulos 

CMBS

Adapting to change

Adam Zausmer, chief credit officer at Ready Capital, answers SCI's questions

Q: Ready Capital and Starz Real Estate recently formed a joint venture to originate around €300m of new commercial real estate loans over the next two years (SCI 21 July). What prompted the move? What is currently exciting to you in European CRE?
A: It was a great opportunity to further expand and diversify Ready Capital’s international lending business. The Starz team is impressive, they are local experts and a highly experienced CRE lending platform.

From a geographic and relationship perspective, Starz has a strong presence in Europe, with deep relationships. For example, we can now originate transitional bridge and term loans throughout Europe - with a particular focus on the UK, the Netherlands, France, Switzerland and Portugal. This will strengthen our presence in Europe, which has been mostly focused on the UK and Ireland to date.

Q: Of course, Starz made the headlines last year with the first European CRE CLO (SCI 1 October 2021). Is this a market you feel can take off, or at least grow, in Europe?
A: From Starz’s perspective - as a non-bank lender - when you look at the European banks, many are generally at maximum capacity on CRE lending exposure, focusing extensively on larger, lower leverage loans and warehouse financing. They tend to be very slow to underwrite and approve loans; therefore, sponsors are considering alternative lenders. Also, Starz generally has few non-bank competitors that understand the tax and enforcement requirements to lend across multiple European jurisdictions.

We can certainly say that Ready Capital has a strong CRE CLO track record in the US, having issued nine deals since 2016, and we plan to leverage Starz’s local expertise to effectively replicate that strategy and optimise returns in Europe. As a firm, we are heavily active in the capital markets and it excites us that Starz has made an entry into the CLO market in Europe. We believe that, with their lending expertise and the amount of volume they plan to originate, there is certainly a robust market for that.

Q: In what can generally be described as a post-Covid-19 phase, but yet still in a complex macro-environment, are there any particular real estate sectors you are currently targeting?
A: We are considering opportunities from a geographic perspective to start with. We are focusing on deals in geographies where the legal framework is easier to navigate and where we can rely on the jurisdictional expertise of the Starz team. We are definitely interested in certain opportunities located in what we classify as the major gateway cities - like Dublin, for example, where there is a material housing shortage - or adaptive re-use of office to residential in major cities throughout the Netherlands.

We are focused, similar to how we lend in the US, on less volatile asset classes that have shorter duration leases that serve as a hedge against inflation - specifically the apartment sector, where there also tends to be a shortage of good-quality, affordable housing. With that said, there are other property types we focus on and are looking at opportunistically, such as industrial and self-storage.

Q: Finally, I wanted to get your views on ESG and real estate? Do you think the lending industry is gradually shifting towards rewarding a ‘green premium’ when financing ESG-led real estate projects?
A: Yes, and ESG is a significant focus of ours in the US. We are involved and looking to get more involved in environmentally-friendly developments.

I think ESG and how it relates to the CRE sector is certainly evolving and our firm is at the forefront in terms of figuring out the best ways possible to execute on our ESG policies. Ready Capital considers green attributes in our underwriting and a developing preference exists for green buildings, due to their energy efficient methods and lower operating costs. In terms of the social impact, we have a substantial presence in the affordable housing space and we have several lending products that support developments in regenerated areas that provide housing options to lower income residents.

Vincent Nadeau

Structured Finance

Early redemption for Spanish synthetic

Sector developments and company hires

Early redemption for Spanish synthetic

Clifford Chance has advised Santander Consumer Finance regarding the early redemption of bonds issued by Santander Consumer Spain Synthetic Auto 2018-1 and the settlement process. This transaction included obtaining consent from various institutional investors and represents the first early redemption of a synthetic securitisation fund in Spain.

The Clifford Chance team was led by global financial markets partner José Manuel Cuenca, with the support of senior associate Leonardo Fernández and associate Virginia Jiménez from the firm’s Madrid offices. Tim Cleary, global financial markets partner in London, advised on English law issues.

In other news…

EMEA

AXA IM has announced the latest stage of its development with the creation of several new devolved business lines. The new business line organisation structure will include the lines of real estate, infrastructure, alternative credit, natural capital & impact investments, and Chorus. The new devolved business lines will be supported by Client Group Alts, in charge of investors’ relations, and will aim to empower the leadership team to meet clients’ needs and drive the growth of the business. The latest evolution of AXA IM Alts, which organises the firm’s existing internal platforms into five dedicated businesses, marks the rapid growth of its business following its formation in March 2020. AXA IM Alts will continue to be led by global head, Isabelle Scemama, and deputy head, Deborah Shire.

Miguel Tolda has joined BNP Paribas as a director, based in London. He is a member of the real estate and non-performing loans team within the bank’s securitised products group. Tolda was previously a vp at Morgan Stanley and has also worked at Credit Suisse and Societe Generale in securitisation-related roles.

Debitos is set to launch a new pan-European loan servicer database aiming to connect investors and banks directly with servicers. Known as Servicing Navigator, the database will allow investors and banks to find their best-suited business partners, and will filter by jurisdiction, asset class, loan type, status, and by licenses. Going forward, Debitos hopes to extend market coverage of the Servicing Navigator with servicers registered on the platform, as well as capture new entrants to the market as it continues to expand across Europe.

European DataWarehouse has upgraded the capabilities of its reporting tool for its securitisation repository platform, EDITOR. The recent overhaul responds to EDW’s initiative to incentivise the exercise of uploading structured data and transaction-level data to a securitisation repository. EDITOR NextGen will give issuers insights into their data upon upload, with instant benchmarking and deal reporting, which can be redistributed internally or to investors, for free. With the updates, EDW aims to empower issuers with these deeper insights, ultimately boosting the worth of reporting for both public and private securitisations. The updates will also feature a redesign in favour of user experience and will also highlight data quality scoring by displaying a given deal’s ECB or ESMA score - dependent on templates used. Additionally, the firm is also expanding the capabilities of its CSV2XML Convertor to streamline the preparation and submission of XML data files by allowing for new custom mapping solutions.

Nuveen has announced the expansion of its private credit specialist team with the hire of Nick ap Simon, to the position of md and private credit specialist. Simon, who joined the firm in August from Cross Ocean Partners - where he most recently served as head of EMEA marketing - brings expertise in private credit, direct lending, and structured credit across Europe and the Middle East to his new role. Additionally, Simon brings business development experience across multiple alternative markets, which includes private debt, private equity, real estate, and infrastructure. He will maintain responsibility for leading and developing the firm’s private credit specialist team which will focus on building lending opportunities and enhancing the team’s external relationships, reporting to Nuveen’s head of EMEA and APAC institutional, Simon England Brammer.

North America

Fannie Mae’s ninth CAS REMIC of the year - CAS 2022-R09 - priced on 21 September. The deal consists of an A3/A-rated $292.585m M1 tranche priced at SOFR plus 250bp, a Baa3/BBB-rated $250.785m M2 tranche priced at SOFR plus 475bp and a small $47.6m B1 tranche rated Ba3/BB priced at SOFR plus 675bp. The joint bookrunners are Citi and Wells Fargo. Co-managers are Amherst Pierpoint, Barclays, Bank of America and Performance Trust Capital. It references a pool of 96,000 mortgages with an unpaid principal balance of $29.3bn. It is a high LTV pool, with LTV values of between 80% and 97%, acquired in 4Q21. In keeping with the trend of the last few months, this is a considerably smaller CAS trade than was common at the beginning of the year.

Freddie Mac is in the market with STACR DNA 2022-07, a $616m REMIC and the GSE’s seventh CRT deal of the year. The reference pool consists of 69, low LTV single family mortgages with an unpaid principal balance of $20bn. The loans were originated after 1 February 2021 and securitized before February 28 2021. There are four tranches, rated A, BBB+, BBB and BBB-.

Morgan Lewis has promoted Lena Surilov and Milan Wozniak to partner, based respectively in its Boston and Chicago offices. Surilov represents financial institutions on complex finance transactions, including asset-based and cashflow financing. Wozniak concentrates his practice in the areas of securitisation and structured finance, including auto ABS and single-family rental securitisations.

PTSB loan sale inked

Permanent TSB has agreed the sale of a portfolio of predominately performing buy-to-let loans, to be funded by way of a securitisation via Glenbeigh 4 Seller. The newly incorporated entity is intended to be funded by funds managed by PIMCO and arranged by Citi. The proceeds will be used for general corporate purposes, including the completion of the Ulster Bank transaction (SCI 9 November 2021).

The transaction involves the sale of a pool of circa 5,170 BTL loan accounts secured on around 6,195 properties. The loan accounts are linked to about 4,915 borrowing relationships.  

The portfolio has a gross balance sheet value of circa €770m, a net book value of circa €700m and an overall risk weight intensity of circa 65%. Approximately 86% of the portfolio is on a tracker product, 12% on a variable product and the remainder is on a fixed rate product.

The loans in the portfolio will continue to be serviced by PTSB for a period of up to six months, after which legal title and loan account servicing will transfer to Pepper Finance Corporation (Ireland).  

Structured Finance

BlackRock preps CLO ETF

Sector developments and company hires

BlackRock preps CLO ETF

In a recent filing with the US SEC, BlackRock has disclosed that it is prepping a CLO ETF, dubbed BlackRock AAA CLO ETF. The fund seeks to provide capital preservation and current income by investing in a portfolio of predominantly US dollar-denominated triple-A rated CLO securities.

Under normal circumstances, BlackRock AAA CLO ETF will invest at least 80% of its assets in US dollar-denominated CLOs that are, at the time of purchase, rated triple-A by at least one of the major rating agencies (or, if unrated, determined by the fund management team to be of similar quality). The fund may invest in CLOs of any maturity and may purchase CLOs in both the primary and secondary markets.

Additionally, it may invest up to 20% of its assets in US dollar-denominated CLO securities that are, at the time of purchase, rated double-A or single-A by at least one of the major rating agencies. It may also invest in floating- and fixed-rate CLO securities, but will not invest more than 10% of its net assets in fixed-rate CLOs.

Further, the fund will not invest more than 10% of its portfolio in any single CLO or more than 20% of its portfolio in CLOs managed by a single CLO manager.

In other news…

EMEA

Adams Street Partners has announced the launch of its European private credit platform as it works to expand its efforts in Europe. The firm has confirmed the launch with the hire of James Charalambides as partner and head of the European private credit team. Charalambides will both lead and manage the firm’s private credit efforts in Europe and all other supporting decision-making processes – including sourcing, structuring, reviewing, and negotiating new deal opportunities. In his new role, Charalambides will report to partner and head of private credit at Adams Street, Bill Sacher. Charalambides joins the firm from Sixth Street Partners where he operated as md in speciality lending.

Apex Group is set to further expand its ESG offering with the launch of its EU Taxonomy Solution which will work to ensure clients’ alignment ahead of rising disclosure requirements. Apex Group’s EU Taxonomy Solution will offer an efficient four-step process to clients, enabling in-scope investors to assess and work upon their alignment to the EU Taxonomy requirements. This will include an eligibility assessment, alignment data request, alignment data review, and alignment calculation and actions. This announcement follows the launch of the Apex Group’s Impact Positive Solution launch - which offers comprehensive impact assessment services to clients for the private markets, and forms another part of the firm’s ESG Impact Month initiative which works to boost accountability for ESG across the financial services sector.

Fitch has announced the appointment of David Fewtrell as a senior director within its business relationship management team. The former CLO portfolio manager will be responsible for managing relationships with private debt funds, direct lenders, law firms, and high yield investors. Fewtrell will report to md and EMEA head of banker and PE coverage, Sean Costello, and will be based in the firm’s London office. He joins Fitch from Investcorp in London, where he served as a portfolio manager and head of trading.

Funding Circle and Bayview Asset Management have announced the launch of a new lending partnership targeting the provision of £700m in funding to small businesses over an 18-month period. The partnership will leverage Funding Circle’s technology and distribution platform to deploy the funding to thousands of small businesses in the UK. The partnership will offer Bayview an efficient and cost-effective method of deploying capital to the real economy with the use of Funding Circle’s instant decision lending technology which allows small businesses to apply for finance in an average of six minutes, with lending decisions made in as little as nine seconds. Bayview will mark just the latest to join a range of lending investors using Funding Circle’s platform, bringing the total committed by just four of their lending investors to support UK SMEs to £2.4bn.

North America

US financial empowerment non-profit Operation HOPE has appointed Eric Kaplan as evp and president of Financial Literacy for All (FL4A). Kaplan joins from the Milken Institute, where he led the think-tank's housing finance programme as director and senior advisor. He will continue in his capacity as a senior advisor to the Milken Institute Center for Financial Markets, as well as an independent board member of KBRA, a board member of the Cameron Kravitt Foundation and as chair of the Fixed Income Investor Network RMBS Task Force.

Structured Finance

M&G finances tech rental firm Grover via ABS deal

Sector developments and company hires

M&G has announced entry into a funding deal with the consumer-tech subscription platform, Grover. Proceeds from the €270m ABS transaction will be used to grow Grover’s product inventory and expand its presence across European markets. Subscribers to Grover’s platform receive access to over 5,000 tech appliances, which are available to rent on a flexible monthly basis. Grover’s services have seen increasing demand from customers in Europe, as interest in its efforts to accelerate societal shift away from tech ownership towards a sustainability-minded rental model grows traction beyond its existing operations in Germany, Spain, Netherlands, and Austria. For the transaction, Grover will be providing the equity capital, and M&G will function as the sole investor across the debt tranches of the bilaterally negotiated pan-European ABS. M&G’s investment has been made on behalf of its clients, including the Prudential with Profits Fund through the firm’s Catalyst strategy which is investing £5bn into innovative and privately-owned sustainable businesses worldwide.

In other news…

EMEA

Intercontinental Exchange (ICE) has announced that the UK Financial Conduct Authority (FCA) will require ICE Benchmark Administration Limited to continue to publish one- to six-month ‘synthetic’ sterling Libor settings until 31 March 2023. Following results from a consultation, the FCA stated that it has no intention to extend beyond this date, and will also be considering the cessation date in light of feedback supporting the continuation of the three-month ‘synthetic’ sterling Libor beyond March 2023.

North America

Demex has hired climate risk veteran, Matt Coleman, to manage its economic valuations for clients and lead pricing for its climate risk solutions business as CRO. Coleman brings extensive expertise to his new role in climate risk insurance and risk transfer with experience in climate science, insurance, and capital markets. He joins from Nephila Climate where he operated as director of strategic partnerships. Coleman will work alongside the firm’s product, growth, and operations teams to establish and refine its offerings for climate insurance and risk valuations for clients and will also lead on structuring and pricing analytics.