Australian expansion

Intertrust has expanded into Australia through the acquisition of Seed Outsourcing – an Australian corporate and fund services firm, providing corporate secretarial, director, domiciliation and payroll services to private equity and real estate fund managers.

CMBS platform launched

Principal Real Estate Investors and MUFG Union Bank have formed MUFG Principal Commercial Capital, a lending platform focused on originating and securitising CMBS loans. The platform will be co-managed by the two companies and both parties will source loan opportunities, participate in credit decisions and execute securitisations for the platform. MUFG Union Bank will fund all loans and retain all risk retention investments, while Principal Real Estate Investors will service all loans and be retained as primary servicer post-securitisation. The platform will be led by Phil Miller, md and head of CMBS activities at MUFG Union Bank, and Margie Custis, md for Principal Real Estate Investors.

Credit-linked funds launched

Bank of Montreal (BMO) Global Asset Management has expanded its liability driven investment (LDI) range with the launch of two funds which combine credit and LDI; the BMO Credit Matching LDI Fund and BMO Credit-Linked Dynamic LDI Fund. The BMO Credit Matching LDI Fund offers defined benefit (DB) pension schemes a de-risking plan, allowing schemes to add to the fund in stages as their funding position improves. Approximately 75% of the fund is invested in physical credit, with the remaining 25% used to create a liability matching overlay. The BMO Credit-Linked Dynamic LDI Fund is designed as a solution for DB schemes looking to hedge liabilities, whilst maintaining exposure to corporate bond markets. The fund aims to avoid the traditional trade-off between return seeking and matching assets. Credit default swaps are used to provide passive, diversified, liquid and capital efficient exposure to corporate bond markets, alongside BMO Global Asset Management’s Dynamic LDI strategy. The fund can be held in place of an existing corporate bond allocation to deliver additional hedging or in place of an equity-linked LDI strategy where a scheme is gradually de-risking from growth assets.  Alternatively, it could be held it in place of a vanilla LDI strategy by schemes looking to re-risk and increase overall corporate bond exposure. For £100 invested, the fund provides around £300 of dynamic liability hedging and around £100 of credit exposure.

Downgrade review

Scope is maintaining its triple-B minus rating under review for downgrade of the credit-linked note issued by Herrenhausen Investment via its Compartment 1. The review for downgrade reflects continued uncertainty over the ongoing restructuring of one delinquent loan, as reported by the issuer, February 2018.

Europe

NatWest Markets has hired Jason Eppleston as a director in its CLO structuring team. Eppleston joined the NatWest Markets CLO structuring team in June to focus on European CLO mandate and has structuring and CLO transaction experience with both sell-side and buy-side firms since 2002. He is based in London and reports to Luca Giancola, head of CLO structuring, NatWest Markets. He was previously at New Amsterdam Capital leading new business initiatives and CLO portfolio management.

ILS

Credit Suisse has hired Paul Hertelendy as head of reinsurance investments and deputy head of ILS strategies as of 1 July 2018. In his role, he will oversee the underwriting as well as the modeling and analytics team and directly report to Niklaus Hilti. Hertelendy was previously chief underwriting officer at SCOR.

North America

Greenburg Traurig has hired Michael Aluko as a shareholder in its New York office. He joins from SECOR Asset Management where he served as in-house counsel.

Portuguese mortgage rule change

Banco de Portugal has instituted new recommendations for underwriting residential mortgages including limits on LTV and debt-to-income ratios and maturities. Moody’s suggests that the new rules will strengthen mortgages’ credit quality which would also boost the quality of future RMBS. The recommendations apply only to residential mortgages loans originated after 1 July 2018.