Company hires and sector developments in structured finance

Cliff edge concerns

ISDA has published a paper highlighting widespread concerns in Europe that the UK may withdraw from the EU without a withdrawal agreement under Article 50 of the Treaty on European Union and without any transition, or implementation period, to allow market participants time to adjust. The paper sets out why a ‘no deal’ scenario has the potential to create a disruptive cliff-edge change in the EU regulatory requirements that apply to OTC derivatives business in a way that may adversely affect EU 27 or UK firms and their EU 27 and UK clients and counterparties. Alongside ISDA, the paper was developed by the Association of German Banks, the Italian Financial Markets Intermediaries Association, the Banking and Payments Federation Ireland, the Danish Securities Dealers Association, the Dutch Banking Association and the Swedish Securities Dealers Association.

Europe

ArrowMark Partners has hired Juan Grana as md and senior member of the ArrowMark investment team. Grana, based in London, will assist the US investment team with the origination, structuring and oversight of SRT investments. He will also help lead the firm’s efforts to cultivate and diversify issuer relationships and sourcing channels. Prior to joining ArrowMark, Grana spent the last five years at Nomura International where he was also md.

CIFC has hired Dan Robinson as cio, Europe, leading the expansion of CIFC’s European investment business with a focus on developing the firm’s European corporate credit investment platform. Previously, he was a portfolio manager and head of liquid credit, Europe, for Apollo Global Management. Based in London, Robinson reports to CIFC’s ceo and cio, Steve Vaccaro.

HSBC has made several external and internal appointments to its real estate group and its global banking division. These include Nicola Free, who joins as md in the infrastructure and real estate group (IRG) financing team from AIG, where she also worked as md. Free also previously worked at Merrill Lynch, responsible for balance sheet management of CRE loans in the UK and across Europe through CMBS. Nikolay Iankov joins as a director in the IRG financing team from Bank of America Merril Lynch and also has prior structured finance experience. Both Free and Iankov will be based in London.

White & Case has expanded its global capital markets practice with the addition of Thomas Falkus as a new partner in London. Falkus will advise financial institutions, sponsors and corporate clients on CLOs, esoteric securitisations, NPLs, fund financings, RMBS and other flow securitisation asset classes. He joins White & Case from Weil, Gotshal & Manges, where he was counsel.

IPO

Bain Capital Specialty Finance (BCSF) a business development company managed by an affiliate of Bain Capital, has filed a registration statement relating to a proposed initial public offering, which is expected to list on the New York Stock Exchange under the symbol “BCSF”.  The completion of the proposed offering depends upon several factors, including market and other conditions. BCSF expects to use substantially all of the proceeds from this offering, net of expenses, to repay a portion of its outstanding indebtedness.  BCSF intends to use any remaining proceeds to make investments in accordance with its investment objectives and strategies and for general corporate purposes. BCSF is an externally managed specialty finance company focused on lending to middle-market companies. 

Rebrand

Halcyon Capital Management has been renamed as Bardin Hill Investment Partners and Jason Dillow has been promoted to ceo from cio. John Bader, who served as chairman and ceo, has retired. The firm and has also sold minority stakes to TPG Sixth Street Partners (TSSP) and Dyal Capital Partners. TSSP has made a new minority investment in the firm, while Dyal has invested additional capital to increase its existing minority investment. As part of the transaction, certain managing principals have purchased equity in the firm. All of the equity sold is new equity issued by the firm, and no current owners are selling equity to the purchasers.

Reference flexibility

LCM Asset Management’s latest CLO – the US$409.9m LCM 28 – seeks to address the phase out of Libor via reference rate flexibility. The coupon paid on the notes can be based on one-month Libor, three-month Libor or “any other applicable reference rate”. The deal’s capital stack comprises class A to E notes, as well as an equity tranche and class X notes.

Return to management

Palmer Square Capital Management is to buy the ownership interest currently held by Montage Investments, returning the company to being entirely management owned. Outside of the ownership change, no other changes are anticipated at Palmer Square and the management team remains in place.  The proposed transaction is subject to various conditions, including the execution of definitive documents and the satisfaction of customary closing conditions.

Risk transfer reshape

Allianz Global Corporate & Specialty (AGCS) is reshaping its alternative risk transfer (ART) line of business into two new specialist teams. With effect from 1 November 2018 the insurance-linked markets team will become a standalone line of business known as capital solutions, led by current ART chief underwriting officer Richard Boyd. The remaining ART practice groups providing corporate solutions, reinsurance, and climate solutions will continue under the existing name of alternative risk transfer, led by Michael Hohmann who moves to ART from his current position as global head of liability at AGCS. To succeed Michael Hohmann as Global Head of Liability, Ciara Brady joins AGCS from January 1 2019, moving on from her current role as head casualty treaty global and international for Swiss Re.

Sears development

Sears has hired M-III Partners to prepare a possible bankruptcy, which could be filed by the end of the week. Sears has a US$134m debt payment due 15 October 2018 which, previous statements by the firm indicate, they may be unable to cover. KBRA has identified 281 CMBS loans, totalling US$20.9bn, across 39 pre-crisis and 221 post-crisis transactions. Of these, KBRA rated 119 deals with exposure to 132 loans, totalling US$9.4bn secured by 132 properties with exposure to the struggling retailer.

Settlements

HSBC has reached a definitive agreement with the US Department of Justice (DOJ) to resolve its multi-year investigation of its legacy securitisation, issuance and underwriting of RMBS issued between 2005 and 2007. Under the terms of the agreement, HSBC North America Holdings will pay a US$765m civil monetary penalty, of which US$492m will be paid by HSBC USA. The settlement releases HSBC from potential civil claims by the DOJ related to its securitisation, issuance and underwriting of RMBS during the period from 2005 through 2007.

US

Freddie Mac has promoted Timothy Kitt to svp and head of pricing and execution in its single family business. Kitt previously led the pricing and analytics team in single-family portfolio management after joining the firm in 2015. Prior to joining Freddie Mac, Kitt held leadership positions in structured finance at Wells Fargo and Sallie Mae.