Sector developments and company hires

Affordable CIRT closed

Fannie Mae has executed a new credit insurance risk transfer (CIRT) transaction that, for the first time, covers a pool of primarily single-family affordable loans. These covered loans are delivered to Fannie Mae with a short-term lender repurchase obligation, provided primarily by state housing finance agencies, which serves as the initial loan credit enhancement. Dubbed CIRT LR FE 2019-1, the deal secures commitments from a panel of eight insurers and reinsurers to cover up to US$1.15bn in unpaid principal balance for loans to be acquired by Fannie Mae between July 2019 through June 2020. Additionally, it covers approximately US$600m in unpaid principal balance of loans previously acquired by the company between January 2018 through August 2018. All covered loans will be originated with fixed rate notes, original terms of 21 to 30 years and LTV ratios greater than 80% and less than or equal to 97%.

Co-portfolio manager named

Andrew Hsu has been named a co-portfolio manager of the US$53bn DoubleLine Total Return Bond Fund, alongside lead portfolio manager Jeffrey Gundlach and co-portfolio manager Philip Barach. Hsu has been a member of the DoubleLine investment team since the firm's inception and head of both the ABS and infrastructure investment teams. Prior to DoubleLine, he worked at TCW, focusing on credit analysis for structured product securities and co-managing two structured product funds. In addition, Gundlach and Sherman were appointed to the portfolio management team of the DoubleLine Low Duration Bond Fund, joining DoubleLine Capital president Barach.

Fallback adjustment vendor selected

The International Swaps and Derivatives Association, Inc. (ISDA) today announced that Bloomberg Index Services Limited (BISL) has been selected to calculate and publish adjustments related to fallbacks that ISDA intends to implement for certain interest rate benchmarks in its 2006 ISDA Definitions.

Bloomberg was chosen following an in-depth selection process, which began with a public invitation to tender published in February. The selection process was run by ISDA and included input from a selection committee with representation from buy- and sell-side market participants.

IOSCO releases LIBOR statement

The Board of the International Organization of Securities Commissions (IOSCO) has published a Statement on Communication and Outreach to Inform Relevant Stakeholders Regarding Benchmarks Transition. It seeks to inform relevant market participants of how an early transition to risk free rates (RFRs) can mitigate potential risks arising from the expected cessation of Libor. 

The key messages to take from the statement are: RFRs provide a robust alternative to IBORs and can be used in the majority of products In both new and existing IBOR contacts, the inclusion of robust fallbacks should be considered a priority, the best risk mitigation to a Libor cessation event is moving to RFRs now, it is prudent risk management for market participants to engage early in the Libor transition process in preparation for the cessation of Libor post-2021.

Middle market expert nabbed

Jessica Nels has joined Churchill Asset Management in the newly created role of principal in the capital markets and syndication team, based in Chicago. Nels will be responsible for middle market club transactions, syndication and lender relationship management, reporting to Randy Schwimmer, head of origination and capital markets. She brings over 15 years of experience in deal structuring, underwriting, originating, syndicating and managing cashflow transactions for private equity-backed middle market companies and was previously a director at Twin Brook Capital Partners. Prior to that, Nels held positions at BMO Healthcare Sponsor Finance and GE Antares Capital.