Sector developments and company hires

ABS head retires

Janus Henderson’s head of ABS investment Ed Panek has now retired from the company and the industry. Colin Fleury, the head of secured credit will assume direct responsibility for the ABS team. Fleury has extensive experience working with ABS, having previously fulfilled the head of ABS investment role. A more junior securitisation expert is being recruited to support Fleury and the existing team of two other experienced ABS portfolio managers.

Apulia guarantee agreed

The EIF has agreed with Banca Popolare di Puglia e Basilicata (BPPB) the first SME Initiative operation with the objective of freeing up the Italian confidi regional guarantee consortia. Implemented through an EIF guarantee, the initiative will also be supported by the EIB, COSME funds and by the Italian Ministry for Economic Development (MISE), which has made available European ESIF funds for this purpose. The project represents an innovative risk transfer, whereby funds managed on a national (or regional) level can be combined with resources from the European programme. The deal represents a synthetic securitisation referencing a portfolio of existing financing, which is currently guaranteed by various confidi from the region of Apulia, whose resources can now be freed up for new operations. Under the agreement, BPPB has committed to extending new, advantageously priced financing to SMEs in Southern Italy for around €120m over the course of 36 months. The €11m of ESIF funds made available by MISE will cover the first and second loss tranches.

IG Italian NPL ABS inked

Hoist Finance has completed its securitisation of Italian unsecured non-performing loans with a gross book value of €5bn (SCI 7 November) via Deutsche Bank and UBS. The transaction represents the first-ever Italian investment grade rated securitisation backed by a portfolio comprising only unsecured NPLs and involves the issuance of €337m notes across three tranches issued by Marathon SPV, with the senior notes - representing 85% of the issued amount - retained by Hoist and rated BBB/Baa2/BBB+ by DBRS, Moody's and Scope. The majority (95%) of the mezzanine (rated B(high)/B1/BB) and junior notes - representing the remaining 15% of the issued amount - have been subscribed to by CarVal Investors, with 5% retained by Hoist to comply with risk retention requirements. The senior notes carry an interest rate equal to 1.8%, while the subordinated notes have a combined capped IRR of 15%. Excess collections from the assets will serve as credit support to all outstanding notes and thereafter be paid to Hoist, as a deferred purchase price. Costs in relation to the establishment of the securitisation - including effects from unwinding the August €225m securitisation - are estimated at €6m, some of which is expected to be accounted for as amortised costs over the life of the transaction.

New manager entity

GSO/Blackstone Debt Funds Management has established a new manager entity – called Blackstone/GSO CLO Management - designed to facilitate the opportunistic investment by Blackstone/GSO Corporate Funding DAC in certain US CLOs that are expected to be structured to comply with the European risk retention regulation. The new entity expects to serve the multiple functions of acting as collateral manager to the firm’s US CLOs and warehouses, acting as ‘originator’ for a portion of the US CLO assets at closing, retaining a portion of CLO equity and providing funding for US CLO warehouse first-loss positions. To assist it in fulfilling these roles, it has entered into a shared services agreement with DFM, pursuant to which it has agreed to share certain professionals with the new entity, undertake credit reviews of the loans for which it intends to be the ‘originator’ for purposes of satisfying the European risk retention regulation and provide certain other related services.