Sector developments and company hires in structured finance

NPL deal markets

Banco Santander Totta is in the market with Hefesto STC (Guincho), a €98m securitisation backed by a €481m portfolio, by gross book value (GBV), of Portuguese non-performing residential, commercial and unsecured loans originated by Banco Santander Totta. DBRS and Scope have assigned provisional ratings, respectively, of triple-B (low)/triple-B minus to the €84m class A notes and triple-C/single-B minus to the €14m class B notes.

Most loans in the portfolio defaulted between 2014 and 2017 and are in various stages of resolution. The secured loans disbursed to individuals are serviced by Whitestar Asset Solutions, the secured loans disbursed to corporates are serviced by HG PT, Unipessoal, and the unsecured loans are serviced by Proteus Asset Management, Unipessoal.

Approximately 51.4% of the pool by GBV is secured. 73.2% (by GBV) of the pool benefits from a first-ranking lien. The secured loans included in the portfolio are backed by properties distributed across Portugal, with concentrations in the judicial districts of Lisbon, Porto and Setubal.  Interest on the Class B notes, which represent mezzanine debt, may be repaid prior to the principal of the Class A notes unless certain performance-related triggers are breached.

RMBS settlement reached

Wells Fargo, along with a group of funds affiliated with BlackRock and PIMCO, has reached a settlement to resolve two class action lawsuits in federal and state court over Wells Fargo’s role as trustee for certain RMBS trusts. Under terms of the agreement Wells Fargo, who denies the claims in the litigation, will pay US$43m. The agreement, which is subject to approval by the court, resolves claims regarding the fulfilment of Wells Fargo’s duties as trustee, including providing certain notifications to certificate holders, for 271 RMBS trusts created between 2004 and 2008. Separate from the settlement amount the company is paying, up to US$70m from trust reserve accounts established in connection with the litigation will be released. The settlement amount was fully accrued as of 30 June 2018.

Spin-off announced

BGC Partners is separating from Newmark Group through the distribution of all the shares of Newmark Group held by the company to stockholders of BGC, and the company will distribute these shares through a special pro rate stock dividend. The spinoff will be effective 30 November 2018 to BGC stockholders of record as of the close of business on 23 November 2018. Following the spin-off, BGC will no longer hold any shares of Newmark and Newmark's class A float will increase from approximately 23 million shares to approximately 150 million shares as a result of the spin-off. Goldman Sachs, Cantor Fitzgerald and Bank of America Merrill Lynch served as financial advisors to BGC in connection with the spin-off, while Wachtell, Lipton, Rosen & Katz and Morgan, Lewis & Bockius served as legal advisors.