Company hires and sector developments

Acquisitions

PERILS has acquired Toronto-based Catastrophe Indices & Quantification (CatIQ), a provider of catastrophe loss and exposure information in Canada. CatIQ will continue to be managed day-to-day by Joel Baker, ceo and founder, while md Laura Twidle will continue to lead the CatIQ team. The firm will also maintain its 11-member advisory board, which includes senior representatives from six Canadian primary writers and global reinsurers on a rotation basis, as well as permanent representatives from Aon, Guy Carpenter, the Insurance Bureau of Canada, the Institute for Catastrophic Loss Reduction and Environment and Climate Change Canada.

Capital markets team bulked out

Cross River Bank has expanded its capital markets portfolio and team, with several new hires from Laurel Road, which was acquired by KeyBank in April. The hires include Noah Cooper - who becomes Cross River’s svp, head of capital markets – as well as Rahul Jha, Joshua Karlgaard and Ryan Callahan. The team will focus on managing the bank’s balance sheet and secondary market activities, including securitisation and loan pool sales. In addition, Cross River is providing a US$70m warehouse facility to Idea Financial, which will enable it to deliver greater access to credit for small business customers nationwide.

GSE competition encouraged 

FHFA director Mark Calabria last week, in the agency’s annual report, encouraged Congress to enact housing finance reform that seeks to increase competition to Fannie Mae and Freddie Mac – by chartering new housing finance providers - and strengthen the FHFA’s safety and soundness powers. Moody’s notes in its latest Credit Outlook publication that a materially lower market share for the GSEs would erode the creditworthiness of both companies and could lead the rating agency to reduce its assumptions of extraordinary federal government support. Additionally, it suggests that more competitors could also lead to weaker underwriting standards or price competition – both credit negatives for GSE creditors – while flexibility to develop stronger capital requirements is credit positive, as it would increase their ability to absorb unexpected losses.

Mortimer downgrade

Moody's has downgraded the provisional ratings of the class D, E and X notes in Mortimer BTL 2019-1 from Baa1, B3 and B1 respectively to Baa2, Caa1 and B2. The move reflects the correction of an input error by Moody's in the yield vector assumption used in its cashflow analysis. The yield vector used to assign provisional ratings did not include any stress related to the basis risk arising because of a potential mismatch between Libor paid by the underlying mortgages and the SONIA rate paid under the notes.