Sector developments and company hires

BUMF 6 injunctions granted

Final injunctions have been granted against Greencoat Investments (GIL) (including against its directors, which include Clifden IOM No.1, Rizwan Hussain, Rajnish Kalia and Alfred Oyekoya), Greencoat Holdings (GHL), Portfolio Logistics (PLL), Patrick Anthony FitzSimons, Maria Stoica and Oyekoya in connection with Business Mortgage Finance 6 (SCI 17 July). A court order has also declared that: neither GHL nor PLL has been validly or effectively appointed as an additional and/or separate trustee of the issuer; PLL has not been validly or effectively appointed as an agent of the note trustee; there is no obligation on the note trustee to declare that an EOD has taken place; none of the notes have become immediately due and repayable, nor has the floating charge crystallised under the terms of the deed of charge; neither FitzSimons nor Oyekoya has been validly or effectively appointed as receiver; BNY Mellon remains the sole note trustee and Sanne Group Secretaries (UK) remains the corporate administrator; Coral Suzanne Bidel, Marc Speight and Beejadhursingh Surnam remain the directors of the issuer; and Target Services remains the cash/bond administrator and special servicer. Further, all acts done by GHL or PLL et al are invalid and of no effect. The defendants, save for Stoica, have been ordered to pay the issuer's costs of the claim on the indemnity basis - to be assessed, if not agreed - and with an interim payment on account of those costs due within 14 days.

CLO head hired

Joel Bensoor has joined Mediobanca as head of loan and CLO trading, based in London. He was previously an investment executive, financial institutions debt and trade finance at CDC Group. Before that, he worked at Avery Row Capital, Deutsche Bank and Markit.

ILS appointments

Hisxcox has appointed Andrew Dolphin has director of underwriting, London, replacing Megan McConnell who is relocating to Manhattan to take on the role of chief underwriting officer for Hiscox USA. Doplhin's appointment is subject to board and regulatory approval. Since joining Hiscox in 2000, Dolphin has been a key part of the evolution of Hiscox Re & ILS from a syndicate focussed London-based business, to the multi-capital diverse product organisation it is today. In September 2018, Andrew was appointed coo for Hiscox Re & ILS and became a member of the executive team. Andrew will commence his new role in October and will continue to be based in London. Chris Lee has also been promoted to coo for Hiscox Re & ILS and will join the Hiscox Re & ILS Executive. Lee joined Hiscox in March 2019 as head of insight, where he was responsible for spearheading data and insights strategy. 

REIT execs charged with fraud

THe US SEC has charged Brixmor Property Group, a publicly-traded real estate investment trust, and four former senior executives with fraud in connection with a scheme to manipulate a key non-GAAP metric relied on by analysts and investors to evaluate the company's financial performance. Brixmor has agreed to settle the Commission's charges and pay a $7 million penalty. The SEC's complaint against the individuals, which was filed in the US District Court for the Southern District of New York, alleges that from the Q32013 to the 3Q2015, Brixmor ceo Michael Carroll, cfo Michael Pappagallo, cao Steven Splain and senior vp of accounting Michael Mortimer improperly adjusted Brixmor's same property net operating income in order to report quarterly numbers that hit the company’s publicly-issued growth targets. According to the complaint, certain of the defendants described their manipulation of the non-GAAP measure as "mak[ing] the sausage," using tactics such as selectively recognizing income from a "cookie jar" account, incorporating certain income that the company had represented was excluded, and improperly lowering the prior year's same property net operating income to give the appearance of stronger growth in the current year.

NPL disposals inked

Banca Monte dei Paschi di Siena has finalised the sale of non-performing exposures (NPEs) for about €455m to a subsidiary of Cerberus Capital Management. The agreement concerns the sale of unlikely-to-pay exposures owned by Banca MPS and MPS Capital Services and the portfolio mainly includes secured loans to corporate customers. The bank has also signed two agreements with Illimity Bank for the sale of almost €700m non-performing exposures. The first transaction concerns the sale without recourse of non-performing loans owned by Banca MPS and MPS Capital Services. The portfolio being sold has a value of over €240m and includes both secured and unsecured loans, originally backed by an ISMEA guarantee. The second transaction concerns the sale of unlikely-to-pay exposures owned by Banca MPS and MPS Capital Services. The portfolio being sold has a value of approximately €450m and mainly includes unsecured loans to corporate customers.

Summary judgment denied

Judge Jennifer Frisch of the Minnesota District Court, Second Judicial District, has denied Goldman Sachs’ motion for summary judgment on claims asserted by Kasowitz Benson Torres on behalf of its client, Astra Asset Management, seeking termination of the Abacus 2006-10 synthetic CDO (SCI 8 March). Astra Asset Management, an investor in Abacus, asserts that Goldman engaged in misconduct relating to the collateral that secured the notes issued by the CDO. On this motion, the court found that issues of fact exist as to whether Goldman received notice of the violations and cured the violations by repurchasing remaining ineligible securities years after it pooled them in the transaction, with the notes subsequently downgraded as a result. The court also declined to foreclose the availability of equitable remedies. The case is scheduled for trial in October. 

WAM consultation

The EBA has launched a public consultation on draft guidelines regarding the determination of the weighted average maturity (WAM) of the contractual payments due under a tranche, as per CRR Article 257(1) (a). The draft guidelines aim to ensure that the methodology applicable for the determination of the WAM for regulatory purposes is sufficiently harmonised in order to increase consistency and comparability in the own funds held by institutions, both for traditional and synthetic securitisations. The methodology should be clear to avoid arbitrage and to allow less sophisticated institutions to use SEC-ERBA when calculating the capital requirement of securitisation exposures. Comments are invited by 31 October and a public hearing will take place at the EBA premises on 3 September.