Company hires and sector developments

AONIA debut

Commonwealth Bank of Australia’s new A$1bn Medallion Trust Series 2019-1 is set to become the first Australian RMBS linked to the Australian Overnight Index Average (AONIA) instead of one-month BBSW. The issuer is understood to be marketing classes A1, A2 and B, while classes C to F will not be offered to investors. The collateral backing the transaction includes owner-occupied (76.2%) and buy-to-let (23.8%) mortgages, with an average CLTV of 59.7% after 43 months of seasoning.

EBRD supports Egyptian ABS

The European Bank for Reconstruction and Development (EBRD) is providing up to EGP1bn billion (€55m) in a securitised local currency multi-tranche bond issuance totaling EGP6bn, issued by El Taamir for Securitisation Company. The issuer, an SPV established by the New Urban Communities Authority (the sponsor), purchased receivables from the sponsor, and the proceeds of the issuance will be used to refinance existing short-term loans of NUCA advanced by commercial lenders under a bridge facility. The transaction will allow NUCA to restructure its balance sheet and strengthen its financial capacity. The EBRD’s participation will help to build the necessary institutional capacity and procedures to develop a sustainable and efficient infrastructure asset management and investment plan for NUCA.

Further Sears closures

Sears parent company Transformco intends to close an additional 96 stores by February 2020, including 51 Sears and 45 Kmart stores located in 28 US states and Puerto Rico. In less than nine months following its US$5.2bn bankruptcy acquisition of Sears Holdings Corporation, the ESL Investments affiliate has put into motion the closure of a total of 243 stores, or approximately 57% of the 425 locations it acquired. KBRA has identified 19 properties across 25 CMBS transactions, totalling US$1.26bn, with collateral or non-collateral/shadow exposure to a Sears or Kmart that is included in the latest round of closures. Of these 19 properties, 12 (accounting for 69% by ALA) generated net cashflow in their most recent financial period that was below the originator’s underwritten estimate. Three – University Mall (securitised in LBCMT 2007-C30), McKinley Mall (COMM 2014-CR14 and COMM 2014-LC15) and Fort Roc Portfolio - Kmart Plaza (B) (MSC 2006-HQ10) – collateralise loans that were in special servicing, as of the October 2019 remittance.