Sector developments and company hires

BMF 6 tender
An application for an administration order in respect of Business Mortgage Finance 6 was presented in the London High Court of Justice last week, with a return date of 18 April. The application was presented by Greencoat Investments, which is understood to be in the process of carrying out a tender process for the acquisition of certain notes, but is not presently a noteholder of the securitisation. The application has been made by Greencoat in its purported capacity as a contingent or prospective creditor of the issuer, but the issuer intends to oppose the application on the basis that Greencoat does not have standing to file it.

CMBS losses
KBRA has examined US conduit CMBS issued between 2005 and 2008 to determine historical losses by vintage, certificate class and original rating. As of the February 2019 remittance period, 23 of the transactions were retired, leaving 168 active deals secured by 1,333 loans comprising an aggregate unpaid balance of US$17.6bn. The total original balance for the 191 legacy conduits in this cohort was US$498bn and these transactions experienced aggregate realised losses totalling US$43.6bn (equating to an 8.74% severity), according to the study.

Debt service change
A proposed law (Bill 87) introduced in Canada last month would require the Province of Ontario to pay all debt-service costs associated with Fair Hydro Trust Series 2018-1 and 2018-2 notes, instead of only providing a contingent guarantee. Moody’s suggests that the rules are credit neutral, given that the change only alters the nature of governmental support and not the underlying risk of the debt. The proposal would end FHT's reliance on future consumer charges to fund the note payments.