Contents

Capital Relief Trades

Fed checks banks' homework

CLN submission path is clearer, but Fed approval far from automatic

While it is seen as a positive development for the US SRT market that Federal Reserve has approved four CLNs from Morgan Stanley, US Bancorp, Santander USA and Huntingdon Banchares for capital relief in recent months, the process of seeking this approval is time-consuming and demanding, cautions Matt Bisanz, a partner in Mayer Brown's financial services regulation and enforcement practice.

Bisanz is an expert in the field and acted for US Bank and Huntingdon in their submissions, which were approved in November and December 2023 respectively.

"It's not an automatic approval. You have to submit a request to the Fed, and they will rigorously review it. It's not the sort of thing when you can just pull documents off the internet and slap them together," he says.

The letter which approved Morgan Stanley's submission, addressed to law firm Davis Polk & Wardell, is dated September 29 and refers to a letter of submission sent on August 15, so in this case the approval procedure took six weeks. The time taken, however, varies according to the bank and the submission.

The approval granted to US Bank, for example, took only two weeks - the reply from the Fed dated November 16 was in response to a submission dated October 31. The cogitation period required for Huntington was slightly longer: the letter of submission was sent on November 17 and approval granted on December 6.

Equally, the time needed to prepare a submission differs according to the bank in question, its financial position, its sophistication and its motivation, though Bisanz suggests eight weeks might be average, once serious negotiations are under way. He also says some banks have been sitting around for years before they received a response from the Fed.

"I'm getting multiple calls a week from people who want to do these deals either as an investor or an issuer, and I tell them what is necessary. It's not just sending an email to the Fed saying "Mother, may I?'" he says.

It's generally seen as good news that the Fed not only approved the four CLNs, but that it said it is also prepared to wave through other CLNs from the same issuer if they are structured and documented in the same way, and, in the case of Santander, also retroactively approved deals priced in 2021 and 2022.

Yet there is no guarantee that other banks will fare just as well. Each one is decided on a case-by-case basis, so there is an element of uncertainty and opaqueness to the whole business.

The ceiling for approval set by the Fed represents another caveat. While the Fed notes it is prepared to give the green light to "substantially identical" CLNs to the one under discussion, this is only up to an aggregate outstanding reference portfolio principal amount of the lower of 100% of the bank's total capital or US$20bn.

In most cases, the lower amount will be US$20bn. This is not a large sum for most US banks. Huntingdon, for example, has total assets of US$188bn while US Bancorp has total assets of US$680bn.

Moreover, as yet the Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC) have not commented yet. Some banks are regulated by these bodies and not the Federal Reserve. Their views, not yet known, will be germane to a large number of US banks which might want to go down the SRT path and for whom the OCC or the FDIC is the principal regulator.

At the moment, nonetheless, cautious optimism appears warranted.

"My takeaway is that it is good that the Fed is open to movement. There are four deals on the website and that is four more than there were before," concludes Bisanz.

Simon Boughey

Structured Finance

SCI Start the Week - 15 January 2024

A review of SCI's latest content

Last week's news and analysis
Big buyers
Five names said to take large bites of JPM SRT whopper
BNPL boom
Middle East consumer ABS set for expansion
Competitive spirit
'Structural evolution' drives Oceanic auto ABS volumes
Fed smiles on SRT
Huntingdon and Santander USA get the green light
First-mover advantage
Views on the CEE SRT market and the EIF’s role in the region
Job swaps weekly: All change at Voya as new ceo announced
People moves and key promotions in securitisation
Latest SRTx fixings released
Index values indicate gradual tightening in spreads and improved outlooks for liquidity
Project finance SRT finalised
BBVA closes bilateral trade
Reaching for the Starz
Future of European CRE CLO market contemplated
Risk transfer round-up - 12 January
The week's SRT developments and deal news
Plus
Deal-focused updates from our ABS Markets and CLO Markets services

Regulars

Recent premium research to download
Hotel CMBS – November 2023
The lodging sector is one of the few bright spots in the US CMBS landscape. This Premium Content article uncovers the reasons why.

Project finance CRT – November 2023
Synthetic securitisation is expected to play a key role in assisting Europe’s transition towards a more sustainable economy. This Premium Content article explores the significance of project finance SRT transactions within this context.

Data centre securitisation – November 2023
Insatiable demand for connectivity is fuelling a rise in data centre securitisation issuance. This Premium Content article tracks the market’s development.

(Re)insurer participation in CRTs – October 2023
(Re)insurer interest in CRTs is rising, but execution of unfunded transactions remains limited. This Premium Content article outlines the hurdles that still need to be overcome.

Utility ABS – October 2023
An uptick in utility ABS is expected as US utilities seek financial solutions for retiring the country’s aging fossil fuel fleet. This SCI Premium Content article explores how the proceeds from these transactions can be used to facilitate an equitable energy transition.

All of SCI’s premium content articles can be found here.

SCI Global Risk Transfer Report 2023: New frontiers in CRT
Sponsored by Arch MI, Man GPM, Mayer Brown and The Texel Group, the free report is available to download here.

SCI In Conversation podcast
In the latest episode, Matthew Bisanz, a partner in Mayer Brown’s bank regulatory practice, outlines how the Federal Reserve’s update on 28 September of the FAQs on Regulation Q is likely to impact the US capital relief trades market. The long-awaited guidance clarifies the definition of a synthetic securitisation and, crucially, states that a reservation of authority can be requested for direct CLNs. Bisanz, for one, anticipates an increased willingness – especially among larger CCAR banks – to enter into CRTs as a result.

The episode can be accessed here, as well as wherever you usually get your podcasts, including Apple Podcasts and Spotify (just search for ‘SCI In Conversation’).

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

SRTx benchmark
SCI has launched SRTx (Significant Risk Transfer Index), a new benchmark that measures the estimated prevailing new-issue price spread for generic private market risk transfer transactions. Calculated and rebalanced on a monthly basis by Mark Fontanilla & Co, the index provides market participants with a benchmark reference point for pricing in the private risk transfer market by aggregating issuer and investor views on pricing. For more information on SRTx or to register your interest as a contributor, click here.

Upcoming SCI events
8th Annual Risk Transfer & Synthetics Seminar
1 February 2024, New York

SCI’s 3rd Annual ESG Securitisations Seminar
16th April 2024, London

Emerging Europe SRT Seminar
16 May 2024, Warsaw

2nd Annual Esoteric ABS Seminar
June, New York

CRT Training for New Market Entrants
14-15 October, London

Women In Risk Sharing
15th October, London

10th Annual Capital Relief Trades Seminar
16 & 17 October 2024, London

2nd Annual European CRE Finance Seminar
November 2024, London

Structured Finance

Radical reform?

ESMA disclosure consultation could pave the way for material improvements

ESMA’s launch of its long-awaited consultation on potential revisions to the European Commission’s securitisation disclosure templates in late December (SCI 21 December 2023) may have negatively impacted interest in submitting responses. Nevertheless, the move could potentially open the door to radical reforms.

ESMA is seeking feedback on four very different possible options (A through D) for reviewing disclosure requirements: delay template review until the Level 1 text changes are underway; keep the current framework with a few tweaks; streamline existing templates for public deals and develop a dedicated template for private transactions; or undertake a full-blown template overhaul, with the aim of creating a fundamentally simpler framework. The first option includes putting any changes to the reporting templates on hold until the EU Securitisation Regulation is next reviewed. The second option would maintain the current requirements with some amendments – for example, including further restrictions on the use of the ‘no data’ option and introducing additional “risk-based metrics”.

At present, some jurisdictions allow private securitisations to opt out from the European securitisation regulation and rely solely on domestic rules. “This option is particularly relevant for the mid to smaller players in this market,” suggests one European securitisation lawyer.

While the first two options in the ESMA consultation would not bring about any fundamental changes to the current framework, the third and fourth options could theoretically open the door to radical reforms. Under the third option, ESMA focuses on a targeted review aimed at streamlining the disclosure templates and developing a dedicated template for private securitisation, including addressing the granularity required in the loan-level data reporting annexes and introducing new templates for asset classes not currently covered, such as trade receivables and synthetic securitisations. The fourth policy option proposes a thorough review of the disclosure templates, aiming at a fundamental simplification of the framework.

Addressing the final point, the lawyer notes: “I think that the mere existence of option D is a clear signal that ESMA acknowledges that the disclosure regime can be materially improved. In fact, in the consultation paper, for each of the four options, there is a section revolving around the following question: "what are the advantages and disadvantages?" Option D is quite interesting in this regard because the consultation paper notes that the disclosure obligations can become so burdensome for some transactions that they make the entire market less competitive.”

He concludes: “I think that the approach is heading in the right direction, because the European authorities recognise that there is something about disclosure and the burden of work it requires that is not sustainable. Having a lot of disclosure obligations is another disadvantage for the securitisation market, compared to others.”

Comments on the ESMA consultation paper are requested by 15 March 2024.

Vincent Nadeau

Structured Finance

Hanging in the balance

UK green securitisation market falling behind

The outlook for the UK’s green securitisation market appears bleak this year, following government backtracking on green policies. In contrast, green originations are anticipated to play a crucial role in driving continental European issuance volumes in 2024.

Last year alone, the UK government took a U-turn on new EPC rules for landlords - despite support for the rules by the majority of buy-to-let property owners - and pushed back the banning of diesel vehicles by another five years from 2030 to 2035. This relaxation in the underwriting of energy-efficient housing for UK BTL properties versus European counterparts could slow the greening of the UK’s housing stock and, in turn, potentially cause serious credit implications for future securitisation issuance as it’s forced to compete with that from other European jurisdictions down the line. Similarly, even as new car registrations are still rising from the pandemic-induced trough, government backtracking on its support of the electric vehicle transition is likely to stall UK EV auto ABS issuance.

Historically, Europe has been a global leader on climate policy. But recent political retreats come in the face of headwinds afflicting consumers over fears of the high cost of climate action.

Despite these challenges, the European market shows signs of resilience for 2024. Strong labour markets, evident wage growth and excess pandemic savings are bolstering consumer performance. Coupled with tight underwriting, this is creating good conditions for green originations and future ESG securitisation issuance.

In fact, green trends are anticipated to play a crucial role in driving European origination and issuance volumes in 2024, including long-awaited rises in later life lending (such as equity release and retirement interest-only mortgages), energy-efficient mortgages and solar ABS.

Solar ABS issuance is set to speed up as more debt is offered to borrowers to make energy-efficient modifications and refurbishments more affordable. The Netherlands is leading the way, with the introduction of new legislation at the end of last year, although similar efforts are yet to be seen in the UK.

High-quality originations are likely to be seen on the continent, given robust EU EPC regulation and the fully amortising nature versus other consumer debt. Solar ABS also typically benefits from higher credit quality borrowers, as well as being more granular than project finance-style deals.

From a macroeconomic perspective, rising interest rates pose some challenges to borrowers in terms of affordability – which could potentially diminish origination volumes across the UK and Europe. However, a stabilising rate environment is anticipated in the second half of the year – which, coupled with emerging incentivisation programmes for borrowers, may pave the way for further green originations.

Claudia Lewis

Structured Finance

Sound the retreat

No end in sight for bank lending deficit

There are multiple and interlocking reasons why US banks have retreated from the loan market, and it is unlikely that these will be resolved at any date in the foreseeable future, according to Anna Kooi, financial services practice leader at Wipfli, the top 20 accounting firm.

In lieu of bank loans, developers and borrowers must turn to other sources of capital or put building and expansion plans on hold.

Though the US economy has so far deftly danced around the promised recession, but it may not be able to continue to display such nimble footwork in 2024. Banks face uncertainty not only in the macro-economic outlook but also in their own portfolios with greater delinquencies in the offing.

Concentration risk also keeps banks on the sidelines as a great many are bumping up against policy limits in the commercial loan books.

This also means that participation levels are meagre by historical standards. Principal lenders are finding it difficult to syndicate loans.

The investor secondary market is proving no help either. “While it hasn’t fully dried up, it is more tepid than we’ve seen in the past, forcing financial institutions to use in-house solutions as well as tightening credit standards because they haven’t got as much to loan,” explains Kooi.

Finally, the implementation of Base III, known in most quarters as Basel III Endgame, will impose considerably more onerous capital requirements upon US banks.

The retraction of capital and decline in confidence can be seen in the findings of a Wipfli report into the state of US banking, released this month, which surveyed 390 institutions across 28 states. The percentage of banks looking to acquire has dropped from 91% at the start of last year to 78% at the start of this.

Fifty-six per cent of banks anticipate growth of only 1%-2% this year, and 29% expect growth of 5%-8%. At the beginning of 2022, only 1% of banks expected 1%-2% growth, while 32% expected 5%-8% growth and 30% expected 5%-10% growth.

“Those lower growth projections are clear evidence that higher interest rates, inflation, reduced money supply, geopolitical tensions and increasing regulation are continuing to test revenue models for banks,” notes the report.

In the deficit of traditional wholesale lending, it seems at least likely that borrowers that cannot or will not wait it out will turn to other avenues to raise capital. The rise of private credit is a prominent feature of the market at the moment, and it seems at least likely that securitization will appear increasingly attractive to some borrowers.

The securitization of whole business lines by banks is a noted recent development in the face of these new dynamics. “We’re hearing about securitization of investment portfolios, to take the assets off the balance sheet to help out with AOCI (accumulated other comprehensive income) and capital,” says Kooi.

Simon Boughey

Capital Relief Trades

Gathering momentum

SRT market update

Following a measured start to the year, SRT investors are expecting a pick-up in issuance to materialise soon. Meanwhile, activity in the US market is clearly gathering momentum.

While at the end of last year it had been reported that a few transactions had been pushed into Q1 of this year, one SRT investor cites the increased shift in focus towards the US market as a potential explanation. He notes: “I know for a fact that a lot of investors are recalibrating towards the US market. Of course, there is a lot of capital to be deployed and given the base rates, investors know they can get quite good returns. However, I still feel that US transactions are riskier and lending is of a more unsecured nature.”

He continues: “However, the funds that can operate on cross-continent transactions are naturally increasingly looking to the US. With issuances from the likes of JPMorgan and Citi, we are seeing massive portfolios come to the market, lots of deployment and nice returns. I think European banks are struggling to stick to the original timeline with some of their deals because of the appetite seen for US deals.”

Analysing the regulatory environment and framework, the investor further points to the “bank-by-bank” approach as benefiting the large US banks. He says: “Life is easier for the US regulator because they only really oversee four or five large banks, whereas in Europe, there are three to five institutions for each large jurisdiction. Therefore, the framework is much more generalist and it cannot be adopted ad-hoc.”

He continues: “I think we are going to see a lot more issuance from JPMorgan, as its books are massive, but also from Citi. If you follow Citi and the issues with its cost base, profitability, layoffs and so on, naturally the next step should be for it to manage its balance sheet.”

In terms of the current SRT pipeline, BNP Paribas is said to be out with a couple of transactions. The first is rumoured to be “a large corporate, 90% investment grade deal from its US book”, while the other is believed to be a “high-yield trade with a blind pool.”

Meanwhile, Rabobank is understood to be finalising a bilateral deal with PPGM. Reportedly, the deal references corporate loans from food and beverage companies, including a significant focus on the agricultural sector.

Commenting on the trade, the investor notes: “It’s a blind pool. Rabo initially showed it to investors and ended up going bilateral with PGGM. I assume that was a cheaper option in the end.”

Looking ahead, the investor anticipates increased activity. “A few deals have now entered the pipeline and more are set to emerge. We expect issuance to start picking up from now onwards.”

Vincent Nadeau

Capital Relief Trades

Back in the game

Citi sells SRT, more in the works, say sources

Citi is said to have sold a SRT transaction referencing corporate loans before the end of last year, and ArrowMark is rumoured to have been the buyer.

ArrowMark has declined to comment.

The deal is believed to have referenced a US$4bn pool of corporate loans. A 0% - 13% first loss tranche is said to have been sold for a spread of just south of 8%.

Citi is the doyen of the SRT market in the US, and is believed to have come back to the market with a bang last year as uncertainty about regulatory treatment of capital relief began to clear. Market sources say that it has been selling exposure to its project finance book in an effort to reduce capital exposure.

In October 2023 it was assessed to have capital requirements of 12.3%, composed of a de rigeur 4.5% CET1 ratio, a GSIB surcharge of 3.5% and a toppy stress capital buffer requirement - derived from its performance in supervisory stress tests – of 4.3%.

Among large US banks, only Deutsche Bank USA, Goldman Sachs, Morgan Stanley and UBS currently have more onerous capital requirements, so clearly it behoves Citi to reduce RWA exposure.

Simon Boughey

Structured Finance

IACPM 'stands ready' to work with US regulators on SRT

Market updates and sector developments

The IACPM says it stands ready to share data and experience on synthetic securitisation with US federal regulators, in order for US banks to share risk in an effective, safe and transparent manner with specialised long-term partners. The move follows recent positions taken in the press or in letters sent to the US agencies, notably by Sheila Bair and Senator Jack Reed, urging the federal regulators to scrutinise the risks associated with synthetic securitisations.

“The goal of the IACPM is to collaboratively work with the US agencies to help build a safe synthetic securitisation market that allows banks to effectively manage their credit portfolios in partnership with professional credit investors and insurers, and in turn support growth in the US economy. These transactions allow banks to safely mitigate risk and reduce their capital requirements, while investors participate in credit risk sharing,” the IACPM notes.

The association cites its decade of gathering experience from longstanding risk-sharing practitioners that demonstrates synthetic risk transfers can be conducted in a safe and sound manner, by risk-sharing partners that fully understand the risks, while adhering to the strict control of banks’ supervisors. In particular, the experience built in Europe over the last decade shows that investors in European risk-sharing transactions are long-term partners of banks and are “fully aware of the risks, run extensive due diligence and stress tests, and close transactions throughout the entire credit cycle”. Furthermore, all credit losses and claims are paid out of the cash posted on day one in a dedicated account.

The IACPM states that two conditions are needed to build a robust risk-sharing process: risk sharing must be effective for banks in terms of amount and cost of capital relief; and transactions must be transparent and executed in line with strict securitisation regulations. This understanding is based on the IACPM and its members working with European regulators and supervisors to share best practices, conduct surveys, understand the impact on capital and define the due diligence, structuring and disclosure features required for effective risk-sharing transactions.

In other news…

Georgia adopts ABS framework based on EU ‘best practices’
The Georgian Parliament has endorsed legislation on securitisation, with the aim of significantly mitigating risks associated with securitisation while enhancing transaction transparency for investors. Specifically, the law aligns with the methodologies of jurisdictions that have mature securitisation markets and incorporates key principles from the prevailing EU securitisation regulations.

In recent years, the country has proactively pursued the establishment of alternative financing avenues for businesses and the introduction of innovative investment instruments to cater to investors. Notably, the Parliament of Georgia enacted the Law on Mortgage Covered Bonds in 2022, governing the issuance of bonds backed by mortgage loans by commercial banks. The implementation of the securitisation mechanism represents a natural progression of this policy and is set to enhance the accessibility of financing for both the financial and non-financial sectors.

The legislation was collaboratively developed under the guidance of the National Bank of Georgia and the Ministry of Economy and Sustainable Development, based on European best practices. Integral to this process was support from the Asian Development Bank, the EBRD and the US Agency for International Development.

Structured Finance

Job swaps weekly: Permira Credit promotes pair to lead expansion

People moves and key promotions in securitisation

This week’s round-up of securitisation job swaps sees Permira Credit appoint two new co-heads to lead the firm’s expansion. Elsewhere, Hildene Capital Management has snapped up a Jefferies executive as head of capital markets, while Axonic Capital has promoted its head of credit to the newly created role of co-cio. 

David Hirschmann and Ariadna Stefanescu have been appointed co-heads of Permira Credit. In their new roles, the pair are responsible for overall leadership of the business as the firm embarks on what it describes as “ambitious growth plans” for 2024 and beyond.

Hirschmann, who joined Permira Credit in 2015 and has over 25 years of experience in European private credit, has led the growth of Permira Credit’s direct lending business from an AUM of €1bn in 2015 to approximately €12bn today. In his new role, he has primary responsibility for private credit, including both direct lending and strategic opportunities. Prior to joining Permira Credit, Hirschmann was an md at Babson Capital Europe, where he was responsible for sourcing and transacting opportunities and was a member of the private debt investment committee.

Stefanescu joined Permira Credit at its inception in 2007 and has 20-plus years of European credit experience. Since joining the firm, she has been involved in all Permira Credit strategies and in recent years, as head of liquid credit, she focused primarily on growing the platform’s business across CLO management - with nine Providus CLOs issued since 2018, today representing €3.5bn of AUM - and structured credit.

Stefanescu also oversees the firm’s multi-strategy credit offering and serves on the CLO management and structured credit investment committees. Prior to joining Permira Credit, she worked at JPMorgan in both the leveraged finance and the high yield capital markets teams.

As part of the leadership transition process, mds Jens Bauer and Claire Harwood have been appointed co-heads of the direct lending investment team.

Meanwhile, Robert Leary, former ceo at ING Investment Management, Nuveen and The Olayan Group, has joined Arrow Global as chair of the board of directors. In the new role, Leary will oversee Arrow’s expansion strategy, as the firm aims to become a leading European alternative asset manager.

Leary stepped down from his position as independent director at London-based insurance group RSA in June after two years with the business. He left his previous position as group ceo at Olayan in July 2019 after two years in which he led the development of the business from a family-managed to a family-governed organisation. Leary currently holds non-executive seats on the board at Citizens Financial Group, Intact Financial Group and Voya Financial.

Atalaya, the alternative investment management firm with US$10bn AuM, has appointed Jeff Fields as president of Atalaya Leasing, the equipment-backed investment arm. He joins Atalaya from his position as ceo of Chesswood Capital Management, a subsidiary of a public specialty finance firm focused on equipment leasing.

In his role at Atalaya, which is newly created, Fields will work alongside Rana Mitra, md and head of leasing. It is hoped that Fields’ experience will help extend the reach of Atalaya as direct lender to end-users and as a financing partner for originators. Before Chesswood, Fields spent 22 years at RBC Capital Markets in a number of leadership positions across multiple asset classes.

Axonic Capital has promoted partner and head of credit Matt Weinstein to the newly created role of co-cio, based in its New York office. He will work alongside founder and co-cio Clay DeGiacinto, overseeing investment management, trading, asset allocation and sector allocation.

Weinstein joined the US$4.3bn securitised credit and commercial real estate asset manager in 2012, leaving his role as svp on Macquarie Capital’s CMBS principal investing team. He previously worked at Spartan Real Estate Capital and Bear Stearns.

Chorus Capital has promoted Elena Cosic to md, head of credit analysis. Cosic was previously an md in the investment team at the firm, which she joined in March 2020. Before that, she was a director at MUFG, managing a team of credit analysts.

Citi has promoted a pair of London-based ABS financing and securitisation vps to director. Ismini Petrides rejoined Citi from Mizuho in November 2018, after a brief stint the firm in 2013. Liesel Schuler joined the firm in July 2014, having previously interned at Deutsche Bank.

CRED iQ has recruited CRE and CMBS veteran Rick Fontana as a senior advisor in its product team. Over his career, he has served in leadership roles at Fortis Investments, TD Securities and Bloomberg. The move coincides with the opening of the firm’s new global headquarters in Wayne, Philadelphia.

Daiwa Capital Markets America has recruited Michael McCarthy to launch its new agency CMO trading desk. McCarthy brings extensive experience in both agency and non-agency CMOs to the new role, including previously building a new issue CMO business from the ground-up at RBC Capital Markets in 2009. The industry veteran joins Daiwa in New York from MUFG where he most recently served as head of macro trading.

Hayfin Capital Management has received in-principle approval to open a new representative office in the Dubai International Financial Centre (DIFC). Jack Richardson, principal, partner solutions will be permanently based in the DIFC office and will work closely with Camilla Coriani, md, partner solutions, who will oversee efforts in the region. With an established local presence, Hayfin aims to enhance its coverage in the UAE and Middle Eastern markets and consolidate local investor relationships.

Hildene Capital Management has hired Jefferies’ Jason Schechter as head of capital markets. He will report to Hildene president and co-cio Brett Jefferson and co-cio Dushyant Mehra.

Schechter leaves his role as global head of CLO origination and US CLO trading at Jefferies after 13 years with the business. Prior to Jefferies, he was the global head of CLO trading and co-head of CLO origination at UBS, where he was responsible for re-starting the CLO origination effort. He also worked at Lehman Brothers, Barclays, Morgan Stanley and Greenwich Nat West (NatWest Markets).

Leadenhall Capital Partners has recruited Yuko Hoshino as senior md for Japan and Asia, within its business development team, reporting to managing partner and deputy ceo Lorenzo Volpi. She was previously partner and head of Japan/Asia at Securis Investment Partners and has over 27 years of experience promoting investment strategies including ILS, structured credit and fixed income alternatives to institutional investors.

Stuart Watson has joined Ogier Global as a director to lead the growth of its UK corporate and fiduciary services offering. Watson is a specialist in capital markets and structured finance and sits on many company boards - in particular those of SPVs - in both an executive and non-executive capacity. He has a particular focus on corporate services and real estate.

PGGM has promoted Niels Las to director, credit risk sharing investments. He was previously associate director at the firm, which he joined in May 2018 as a junior investment manager. Before that, Las was an analyst at impact investment consultancy Nederlandse Investeringsinstelling.

And finally, Guernsey-based fund manager Sarnia Asset Management has appointed Harald Berlinicke as partner – manager selection. Over the past nine years, Berlinicke has worked as director for alternative investments at Scope Group. Earlier on in his career, he was partner and senior portfolio manager at New Bond Street Asset Management and head of structured credit investments at Bankgesellschaft Berlin.

Structured Finance

IFC, SG team up on sustainable finance

Market updates and sector developments

Societe Generale and IFC have signed a Collaboration Framework Agreement to accelerate efforts on sustainable finance in developing countries, as part of both institutions' shared ambition to contribute to the UN Sustainable Development Goals (SDGs) and a strong commitment to the environmental transition and sustainability.

As part of this agreement, the two institutions aim to further develop wide-ranging financing solutions - such as project co-financings or risk-sharing agreements - contributing to private sector mobilisation in support of the climate transition.

In particular, the agreement will support sustainable finance projects to facilitate access to clean energy, water and other infrastructure and to foster sustainable agribusiness, as well as the financing of projects empowering women entrepreneurs in SMEs. Societe Generale and IFC will also share approaches and expertise on methodologies and frameworks aimed at measuring and monitoring impact.

This partnership will draw on the complementary strengths of the two institutions. Societe Generale will bring its expertise in structured finance and ESG, its ability to distribute assets to investors and its global reach. IFC will leverage its experience as the largest global development institution focused on the private sector in developing countries, including its balance sheet strength and in-depth knowledge of developing economies.

This new Collaboration Framework Agreement builds on a longstanding partnership, solid cooperation track record and a joint commitment towards the SDGs and rigorous ESG standards. Over the last 10 years, the two institutions have co-financed about 60 transactions with other partners, representing more than US$20bn in new investment flows into developing countries. IFC has also provided approximately US$1.3bn in financing to Societe Generale; for instance, to enable the scaling-up of green vehicle fleets.

In other news…

Strategic financing vehicle launched
Citi and LuminArx Capital have launched Cinergy, a strategic financing vehicle in the rapidly growing private lending market. Cinergy will offer a broad range of private credit solutions and invest across multiple asset classes, including asset-backed credit (commercial, consumer and residential).

To support Cinergy, LuminArx and its global institutional partners intend to commit more than US$2bn of capital. In addition, Citi’s spread products franchise will provide innovative leverage solutions to Cinergy to expand its investment capacity.