Sector developments and company hires

DLT legal analysis published
ISDA, Clifford Chance, R3 and the Singapore Academy of Law have published a new whitepaper that provides analysis on the legal issues relating to the use of smart derivatives contracts on distributed ledger technology (DLT). Given the inherent uncertainty about where data, assets and even counterparties are located in a DLT environment, a key question is how to determine which law applies to these relationships and assets, and what should happen when there are conflicts of governing law. The paper therefore explores choice of law and enforceability, as well as the use of digital assets. Overall, it recommends that parties are permitted to agree on a common ‘law of the platform’ – a uniform choice of law that the parties agree will govern all transactions conducted on the DLT platform.

EMEA
Funding Circle has appointed James Crispin director, capital markets - ABS and institutional sales. He was previously head of European structured products group (SPG) syndicate at JPMorgan and before that was vp - European SPG syndicate at Merrill Lynch and head of European SPG research at Credit Suisse.

Mortgage quake bond closed
Swiss Re has closed Sierra 2020-1 on behalf of Bayview's MSR Opportunity Fund. The US$225m catastrophe bond is the first to be issued under Rule 144A with a parametric trigger that is designed to cover mortgage default risk caused by earthquakes in California, Oregon, Washington and South Carolina. The two-tranche transaction issued by Sierra, a Bermudan SPV, has a three-year risk period and provides protection using data provided by the US Geological Survey.

Jean-Louis Monnier, head of retro & ILS structuring of Swiss Re's Alternative Capital Partners, says: “Parametric solutions help speed up the claims process, while offering greater transparency to investors. This landmark transaction underscores the potential of the capital markets in helping to reduce the hedging gap and build resilience against uninsured risks prevalent in the US mortgage markets.”

Swiss Re Capital Markets acted as the sole structuring agent on the transaction and was also joint-bookrunner alongside Goldman Sachs.