Company developments and new hires in the structured finance sector

Acquisitions

Vistra has completed the acquisition of the corporate services business of Deutsche Bank’s global transaction banking division. The corporate services business will now be rebranded under the Vistra umbrella. The acquisition broadens the company’s presence in seven of the existing locations across Europe, the Cayman Islands and Mauritius, providing further scale and expertise in these jurisdictions and involves management and administration of SPVs and asset holding companies to banks, non-bank financial institutions and corporates. The business specialises in the administration of structures for structured finance transactions including CLOs, CDOs, securitisations and MBS.

Corporate ABS ratings cut

S&P has lowered its credit ratings on Greene King Finance's class A, AB and B notes respectively from single-A minus to triple-B, triple-B to triple-B minus and triple-B minus to double-B plus. The agency attributes the move to a challenging operating environment - amid high cost inflation and weak real wage growth in the UK - which caused it to lower its earnings and cashflow forecasts for Greene King Retailing, the sponsor. S&P notes that the transaction is likely to qualify for the appointment of an administrative receiver under the UK insolvency regime. An obligor default would allow noteholders to gain substantial control over the charged assets before an administrator's appointment, without necessarily accelerating the secured debt, both at the issuer and at the borrower level.

Fairhold Securitisation

The High Court of Justice, Business and Property Courts in London has granted a declaration of invalidity of the appointment of John Hedger of Seneca IP, Michael Bowell and Dermot Coakley of MBI Coakley as joint administrators to the Fairhold Securitisation (the purported appointments).  Accordingly, the purported appointments are void and of no legal effect. Additionally, the court declared that neither Clifden nor any director, servant, employee or agent of Clifden (including for the avoidance of doubt Rizwan Hussain) are or have at any time been authorised agents of the note trustee, for the purposes of appointing administrators of the issuer or otherwise, authorised to take any steps in the name of the Issuer (in administration or otherwise), authorised to represent to any party or announce that the issuer is in administration, or that Bowell, Coakley and/or Hedger have been appointed as administrators of the Issuer. Injunctions have also been made stating that – amongst other things – Clifden shall not, unless ordered by the court, represent or make any announcement, communication or otherwise in any form whatsoever that any of Bowell, Coakley and Hedger have been appointed as administrators of the issuer, or otherwise that the issuer has been, is, or will be in administration, liquidation or other insolvency process. Additionally, unless ordered by the court, Hedger cannot make any announcement, communication or otherwise in any form whatsoever that any of Bowell, Coakley and Hedger have been appointed as administrators of the issuer, or otherwise that the issuer has been, is, or will be in administration, liquidation or other insolvency process. Finally, the court ordered Clifden and Hussain to pay the costs of the issuer, the note trustee, Bowell and Coakley, such costs to be subject to a detailed assessment on the indemnity basis, if not agreed, with payments on account of certain of such costs to be made by 4pm on 7 September 2018. The court also directed that a copy of the transcript of the judgment given by the court on 10 August 2018 be brought to the attention of the Insolvency Service.

Hybrid trading platform

The first hybrid cryptocurrency derivatives trading platform has launched, in partnership with GMEX Technologies. Dubbed Blockchain Board of Derivatives, the platform combines the speed of centralisation with the security of decentralisation. In order to allow traders to keep control of their funds, the solution also offers what is described as a unique custody solution - the smart contract wallet system. Additionally, it offers a number of leveraged peer-to-peer cryptocurrency derivative contracts and enables traders to save up to 20% in fees by using the platform’s BBD tokens.

Irish NPL sale

KBC Bank Ireland has sold an approximately €1.9bn portfolio of non-performing corporate book, non-performing Irish buy-to-let mortgage and non-performing UK BTL mortgage loans to the Goldman Sachs Beltany Property Finance, Tramore Funding and Banna Funding vehicles. The transaction will reduce KBC Bank Ireland’s NPL levels by approximately 40% and provide a net P&L impact of plus €14m, representing a release of approximately €400m risk-weighted assets. Pepper Asset Servicing will manage the loans post-completion of the transaction on behalf of the buyer.

North America

AlphaPoint has hired Ned Myers as head of product. In this newly created role, Myers will be responsible for product strategy and execution as well as AlphaPoint’s marketing functions. With over 25 years of experience in financial technology and securitisation industries, Myers comes to AlphaPoint after leading the capital markets and government businesses for Black Knight’s data and analytics division. Myers also spent two decades with Lewtan, a securitisation data and software company.

I-ON Communications has appointed four new independent directors, which increases the size of I-ON's board of directors to seven from three currently. One of the appointed directors is Armand Pastine, who currently serves as the ceo of CG Capital Markets, a New York and Florida-based investment banking boutique specialising in middle market sales and trading, institutional structured credit products, and capital markets placements of debt and equity investments to qualified institutional buyers.

Sunflower Bank has launched a new structured finance group to provide relationship-focussed asset based lending and leveraged finance services to lower middle market companies and private equity investors. TJ Kern joined the company in January as structured finance group manager and team lead while Dustin Jacobson has been hired as md of asset backed lending and David Harper has been hired as md of leveraged finance. Kern has over 30 years of commercial banking experience, including 12 years in leveraged finance, and previously managed the structured finance team at CoBiz Financial. Jacobson was most recently vp and relationship manager at NBH Capital Finance where he helped build the asset-backed lending (ABL) platform and the ABL and transportation finance portfolios. Harper will be responsible for identifying and managing leveraged finance and other corporate banking opportunities and most recently he was cfo and coo at ICC Wireless.

Rating agency approval

ESMA has registered Moody’s Investors Service (Nordics) as a CRA under the CRA regulation and takes effect from 13 August 2018. Moody’s Investors Service (Nordics) AB is based in Sweden and intends to issue sovereign and public finance ratings, structured finance ratings and corporate ratings.

Settlements

The US Justice Department has issued a US$4.9bn penalty on RBS, resolving federal civil claims that RBS misled investors in the underwriting and issuing of RMBS between 2005 and 2008. The penalty is the largest imposed by the Justice Department for financial crisis-era misconduct at a single entity. RBS was found to have routinely made misrepresentations to investors about significant risks it failed to disclose about its RMBS. The bank also failed to disclose systemic problems with originators’ loan underwriting, changed due diligence findings without justification, provided investors with inaccurate loan data and failed to disclose due diligence and kick-out caps. These are allegations only, which RBS disputes and does not admit, and there has been no trial or adjudication or judicial finding of any issue of fact or law.