Sector developments and company hires

Private credit double announced

Solar Capital Partners has hired two senior private credit investment professionals. Eric Herr joins as a partner, to help lead investment origination across the firm's multi-credit strategy platform. Most recently, he served as an md of loan originations at NewStar Financial and previously worked at Churchill Financial, GE Antares and GE Commercial Finance. Eduard Shagas also joins SCP as a partner and senior underwriter, having previously been a principal of WhiteHorse Capital. He has also worked at PennantPark Investment Advisers.

Reform recommendations

Barclays, in partnership with Annaly Capital Management, has released a study entitled ‘GSE Reform: Unfinished Business’, which lays out steps that policymakers might take to reform Fannie Mae and Freddie Mac. Among the key takeaways of the report is that a revolving credit risk transfer structure could enable the GSEs to shed credit risk on most future production, thereby avoiding execution risk while protecting the taxpayer. Further, to attract private capital, the GSEs could shrink their footprint in areas that are not part of their core mandate - such as second homes, investor and jumbo mortgages. Additionally, if the goal of GSE reform is to foster competition and materially decrease ‘too big to fail’ risk, Congress will have to pass legislation that replaces the GSE duopoly with multiple smaller guarantors.

Third-party authorised in France

Prime Collateralised Securities’ Paris based entity, PCS EU, has been authorised by the Autorité des Marchés Financiers as a third-party verification agent pursuant to article 28 of the STS Regulation, effective immediately. With PCS UK, authorised in the United Kingdom, the PCS initiative now possesses authorisation in two separate European Union jurisdictions.  This will allow originators to select which entity they wish to contract with to obtain a verification of the STS status of their transactions.  For so long as the United Kingdom remains in the European Union, both entities’ verifications will fully meet the requirements of the STS Regulation as they both benefit from a passporting authority valid throughout the union.  Thereafter, our current configuration will allow us to maintain our work for the benefit of the securitisation markets across the European space and irrespective of the final outcome of the Brexit process.