Australia

FIIG Securities has hired Anne-Marie Hunter-Brown to the role of markets business manager, Australia. She was previously at Deutsche Bank as IB markets coo and business manager across global credit including structured credit.

Assured Guaranty rebuttal

Hedge fund manager David Einhorn recently stated that he is betting on Assured Guaranty’s stock falling, and that it “hasn’t got enough new business coming into the firm to offset amortisation of the portfolio.” In its defence, Assured Guaranty has released a statement that it “strongly disagrees” with Einhorn’s comments and says that “in the event of a municipal default, Assured Guaranty is obligated to cover shortfalls in scheduled principal and interest payments only when those payments are due. Our insurance policies do not permit acceleration of payments without our consent. Mr. Einhorn’s focus on total debt service ignores this lack of acceleration, as well as the strength of our balance sheet, and the highly liquid nature of our investment portfolio, which generates significant investment income over time. Furthermore, Assured Guaranty is well reserved for its municipal exposures and, due to the non-acceleration feature, does not face liquidity risks. We have US$11.5bn of cash and investments with US$2.8 bn of estimated excess capital over S&P’s AAA level. In addition, we have strong legal rights, including for Puerto Rico under PROMESA, which requires that fiscal plans must respect contractual liens and constitutional priorities established under Commonwealth law.”

CDO manager replaced

Dock Street Capital Management has been appointed successor collateral manager to Straits Global ABS CDO I, as well as the Independence IV, V and VII CDOs originally managed by Declaration Management & Research (see SCI’s CDO manager transfer database). For each transaction, two employees of Dock Street will replace key management personnel, effective from 20 April. Moody’s confirms that the move will not impact its ratings (including any shadow, private or confidential ratings) on the deals.

Commercial lending venture

Angel Oak has launched Angel Oak Commercial Lending, which will provide both short- and long-term financing to underserved commercial real estate owners, developers and investors. The firm hopes to move into what it describes as a “lending void” in specific segments of CRE, including transitional and stabilised projects, especially those under US$5m in size. Ex-Ansley Atlanta Real Estate evp Ben Easterlin has been named svp of commercial lending at Angel Oak. Over his 20-year career, he has provided, arranged or consulted on over US$3bn of debt and equity placements.

Europe

Vegard Nilsen has been named ceo of London-based Securis Investment Partners. He has served as coo at the firm since July 2005 and before that worked at ORN Capital, Digital Capital and Salomon Brothers. Securis co-founder Rob Procter continues as cio.

European bank recruiting CRT talent

Banca IMI is looking to hire a senior loan management specialist with experience in experience in securitisation, regulatory capital transactions or deleverage of illiquid and non-performing assets, amongst other things. The scope of the role will cover a range of activities including supervising and preparing marketing material for origination activities and will be based in Italy.

Legacy mortgage portfolio sale

Bradford & Bingley, part of UK Asset Resolution Limited (UKAR), has agreed to sell two separate portfolios of buy-to-let and residential owner-occupied mortgages to an investor group led by Barclays Bank for a total of £5.3bn. The sale is expected to be completed within the next few weeks and will enable total loan repayments of £5.3bn to HM Treasury, which includes the remaining £4.7bn of the Financial Services Compensation Scheme (FSCS) loan. This follows the repayment of £10.9bn in 2017 and means that the £15.65bn FSCS loan extended to Bradford & Bingley when it was nationalised in 2008 will have been repaid in full. The sale is based on the portfolio position as at 30 September 2017, from which point the purchaser will acquire the risks and rewards of ownership of approximately 45,000 Bradford & Bingley and Mortgage Express mortgages. The mortgages in this transaction will be sold to two wholly-owned subsidiaries of Barclays Bank with equity funding from funds managed by Pimco. A finance package in the form of a commitment to buy investment grade bonds has been made available to the purchasers by a consortium made up of Barclays Bank UK, HSBC, Lloyds, Nationwide, NatWest Bank and Santander UK. Morgan Stanley acted as financial advisor to UKAR in this process.

North America

Jason Yang has joined BNP Paribas as head of credit structuring, New York. He was most recently founder and ceo of Polly Portfolio and prior to that was a partner and senior portfolio manager at C12 Capital Management.

Prytania Asset Management has hired Fahd Basir as md, based out of the firm’s newly opened New York office. Previously, Fahd was a director at 25 Capital Partners and he brings broad structured credit experience spanning 14 years including both agent and principal transactions across the capital structure over a wide variety of asset classes.

RCR criteria launched

S&P has introduced criteria for resolution counterparty ratings (RCR), which represent a new special-purpose rating type applicable to certain financial institutions subject to a bail-in resolution policy framework. The criteria are applicable to financial institutions globally that are likely to be subject to an effective bail-in resolution regime in the event of distress. The agency expects that fewer than 50 collateralised bonds globally that are currently rated at the level of the issuer ICR could be upgraded by a notch because they may be classified as RCR liabilities.

RFC on STS guidelines

The EBA has launched a public consultation on its draft guidelines that aim to provide a harmonised interpretation of the STS securitisation criteria, including for ABCP. The guidelines will be applied on a cross-sectoral basis throughout the EU to facilitate the adoption of the STS criteria. The consultation runs until 20 July, with a public hearing due to take place at the EBA premises on 11 June.

Statement issued on manufactured credit events

The CFTC divisions of clearing and risk, market oversight, and swap dealer and intermediary oversight has issued a statement regarding manufactured credit events in connection with CDS. It says that, "The CDS market functions based on the premise that firms referenced in CDS contracts seek to avoid defaults, and as a result, the instruments are priced based on the financial health of the reference entity.  However, recent arrangements appear to involve intentional, or ‘manufactured,’ credit events that could call that premise into question.” The CFTC adds: "Manufactured credit events may constitute market manipulation and may severely damage the integrity of the CDS markets, including markets for CDS index products, and the financial industry’s use of CDS valuations to assess the health of CDS reference entities.  This would affect entities that the CFTC is responsible for overseeing, including dealers, traders, trading platforms, clearing houses, and market participants who rely on CDS to hedge risk. Market participants and their advisors are advised that in instances of manufactured credit events, the divisions will carefully consider all available actions to help ensure market integrity and combat manipulation or fraud involving CDS, in coordination with our regulatory counterparts, when appropriate.”