Sector developments and company hires

Call for FFELP solution
The SFA has joined the Education Finance Council (EFC) in calling for wholesale legislation to smoothly transition FFELP student loans and the related subsidy away from Libor, to avoid potential disruption to over US$277bn of loans spread across 13 million borrowers. The EFC is working on a legislative solution that would transition the subsidy - called the Special Allowance Payment - paid to lenders on student loans originated under FFELP away from Libor. EFC has two main concerns: the impact of the Libor replacement on legacy FFELP ABS bonds that pay a Libor-based floating rate coupon; and the impact on cashflow generated by Libor-based FFELP Special Allowance Payments.

Libor transition at different speeds
A new Moody’s report suggests that structured finance markets are transitioning from Libor to a new set of global reference rates, which are less volatile in stressed credit environments but can be affected by the supply of and demand for collateral. However, it notes that markets are moving at different speeds. Most UK issuance in 2020 will be based on Sonia, for example, while the transition to Sofr in US securitisations has been limited so far.

North America
Christopher Giancarlo, former chairman of the US CFTC, has been appointed independent, non-executive chairman of Common Securitization Solutions (CSS). Concurrently, CSS will amend the structure of its board to provide Anthony Renzi – who was appointed CSS ceo last month - a seat on the board and allow FHFA to appoint up to three additional independent directors. Fannie Mae and Freddie Mac will each retain their two current board seats. Giancarlo is senior counsel to Willkie Farr & Gallagher and serves as a board member of the American Financial Exchange (AFX) and a member of the advisory board to the Chamber of Digital Commerce.