Company hires and sector developments

Blockchain standardisation steps taken

The standardisation of blockchain technology, which the International Organisation for Standardisation (ISO) and others are promoting, will be credit positive for future securitisations that utilise the technology, says Moody’s. Although the technology itself has the potential to provide many benefits to the securitisation market, namely via interoperability and operational efficiencies, the current lack of standardisation holds back market adoption.

Moody’s add that standardisation of blockchain technology would make its benefits more accessible and that blockchain standards will likely emerge by 2021. Global blockchain standardisation is primarily driven by the ISO, which established in 2016 a technical committee on blockchain and distributed ledger technologies (DLT). The rating agency adds that the currently fragmented blockchain landscape limits its benefit to securitisations.

Deputy head announced

Stephan Ruoff, until most recently group ceo of Tokio Millennium Re, will assume the newly-created role of deputy head of Schroder Secquaero in November. Stephan brings with him long-standing and extensive underwriting and management experience. As the former ceo of Tokio Millennium Re, which acted as a transformer for many ILS managers, he has a broad and deep knowledge of the alternative capital market for reinsurance.

Euro md appointed

Intermediate Capital Group (ICG) has appointed Julia Beinker as an md to support its growing distribution activities in Europe, with an initial focus on Austria and Germany. Beinker joins ICG from Muzinich & Co where she has worked for the past three years as an md responsible for growing the Company's client base in Austria and Germany.

Junior portfolio manager appointed

Spire Partners has appointed Daniel Bates as a junior portfolio manager, focused on structured credit investing. He was previously a junior portfolio manager at WyeTree Asset Management and will broaden Spire’s capabilities as it continues to grow its product offering to investors.

Permanent amendments

The transaction documents for the Permanent Master Issuer 2011-2, 2015-1, 2016-1 and 2018-1 RMBS have been modified to ensure that the programme complies with and is eligible for designation under the STS framework. The documents have also been amended to reflect the potential cessation of Libor. Specifically, the interest rate paid on the notes has been changed to Sonia and appropriate provisions made for any US dollar denominated notes to be issued by the master trust.

Reinsurance and portfolio solutions head hired

BPL Global has hired Gregory King-Underwood as director and head of global reinsurance and portfolio solutions. The firm notes that his hire comes at a time of rising synthetic securitisation and growing synergies between credit and political risk insurance and reinsurance markets.

Valuations scam uncovered

The US SEC has charged Live Well Financial and its ceo, Michael Hild, with perpetuating a multi-million dollar bond mismarking scheme against Live Well's short-term lenders. The complaint also charges Live Well's cfo, Eric Rohr, and evp, Darren Stumberger, both of whom consented to partial judgments against them.

The US SEC alleges that Live Well, under the direction of Hild, fraudulently inflated the value of its portfolio of complex reverse-mortgage bonds.  According to the complaint, Hild directed Live Well to submit falsely inflated bond prices to an industry-leading pricing service, who he knew would simply publish the prices Live Well gave it. As Hild was aware, most of Live Well's lenders relied on those inflated prices in loaning money to Live Well through repurchase securities transactions. Through this alleged scheme – which Hild called a "self-generating money machine" – Live Well was able to borrow tens of millions of dollars more from its lenders through the securities transactions than it could have borrowed had the bonds been priced accurately and was able to fund lavish compensation packages for Hild and others. 

During the 18 months following the implementation of the scheme, Live Well's bond portfolio shot up in value from US$71m to US$570m. According to the complaint, the fraudulent scheme collapsed in 2019 when Live Well's lenders sought to sell the bonds back to Live Well and Live Well did not have the requisite funds to complete the repurchase securities transactions, leaving its counterparties exposed to losses in excess of US$80m. In a parallel action, the US Attorney's Office for the Southern District of New York has announced criminal charges against Hild, Rohr, and Stumberger.