Company hires and sector developments in structured finance

CRT poll results
The results from SCI’s ‘What’s in a name?’ survey are in. Delegates at SCI’s Capital Relief Trades Seminar yesterday were polled as to what the most appropriate term should be for capital relief trades from 11 different choices. Out of over 80 responses, 22% voted for ‘credit risk transfer’, 20% for ‘risk-sharing transaction’, 18% for ‘capital relief trade’ and 17% for ‘significant risk transfer’. ‘Regulatory capital trade’ captured 8% of the vote, while ‘synthetic securitisation’ captured 7%. ‘Credit insurance’, ‘capital release transaction’, ‘regulatory capital deal’ and ‘risk partnership deal’ all received minimal numbers of votes, and there were no votes for ‘capital protect transactions’.

Fraud claim settled
Nomura Holding America and several of its affiliates have agreed to pay a US$480m penalty to resolve federal civil claims that Nomura misled investors in connection with the marketing, sale and issuance of RMBS between 2006 and 2007. The settlement stems from allegations that Nomura knowingly securitised defective mortgage loans in its RMBS and misled investors regarding the quality and characteristics of those loans. The bank allegedly also knew that a significant number of loans that it securitised had not gone through Nomura’s stated due diligence process and, more broadly, that its process had been compromised. Despite this knowledge, it failed to address the weaknesses in its due diligence processes and continued to do business with originators that, according to its own due diligence personnel, were “extremely dysfunctional,” had “systemic” underwriting issues and employed “questionable” origination practices.

Servicer acquisition
Pretium Partners has entered into an agreement to acquire Selene Holdings from funds managed by Oaktree Capital Management and Ranieri Partners. Selene Finance is a special servicer of non-performing, re-performing, REO and performing loans. The transaction - which is subject to customary closing conditions and regulatory approvals - is expected to close mid-year 2019. Houlihan Lokey served as exclusive financial advisor to Selene, while Buckley Sand served as Selene’s legal counsel. Sidley Austin served as legal counsel to Pretium.