Sector developments and company hires

ESG impact assessed

The credit impact of environmental, social and governance (ESG) investment criteria on CLOs rated by Moody’s remains neutral, the agency says in a report. The firm adds that while restricting the pool of CLO eligible collateral has the potential to be credit negative, CLOs limited exposure to the industries subject to ESG restrictions largely mitigates this risk.

Furthermore, Moody’s notes that that the performance of CLOs that were early adopters of ESG investment criteria has been comparable to that of CLOs without ESG restrictions. The agency highlights five CLOs in the last 18 months issued in alignment with ESG criteria and the firm has rated two of these from the US, Venture 38 CLO, Limited and Pikes Peak CLO 4 (PP4). Both of these prohibit the acquisition of collateral issued by an obligor whose principal business is directly derived from the production or marketing of controversial weapons (including antipersonnel landmines, cluster weapons and chemical weapons), the development of nuclear weapons programs or the production of nuclear weapons or thermal coal. PP4, in addition, also prohibits the acquisition of collateral issued by an obligor in the tobacco industry.

The report concludes that ESG criteria will continue to evolve, with short-term supply and demand imbalances of ESG collateral and potential pressure on CLO diversification unlikely to persist in the long term.

Online non-prime ABS debuts

US online lender, LendingPoint is marketing its first securitisation backed by non-prime, unsecured, consumer installment loans. The US$169.386m securitisation, dubbed LendingPoint 2019-1, is backed by 18,760 loans to borrowers across the US and is provisionally rated single-A minus on the US$112.151m class A notes, triple-B minus on the US$24.517m class Bs, double-B minus on the US$22.555m class Cs and single-B minus on the US$10.163m class D notes.

Real estate firm makes strategic hire

Urban Exposure has hired Graeme Alfille-Cook, joining 2 September this year, as chief strategy officer. He has over 28 years' experience within the financial and real estate sectors having held various roles within Lloyds Banking Group, including md of Lloyds' commercial real estate development team. Prior to that he was a relationship director covering many of the bank's highest profile and complex real estate relationships. He also has extensive experience in the structured credit and securitisation markets, with other roles encompassing client coverage in the FMCG sector and risk.