Sector developments and company hires

CMBS property sales
KBRA has been notified of the sale of 29 properties in the Eos (ELoC No. 35) CMBS. All of the properties are located in the Netherlands and nearly all (28) are industrial assets. As a result of the sale, an amount equal to €74.3m will be applied in mandatory prepayment of the senior loan, representing 17.9% of the original senior loan balance of €416m. The amount is expected to be applied against the notes at the next note payment date in April. KBRA expects the transaction’s in-trust KLTV to decline from 86.9% at securitisation to 81.1% as a result of this and two smaller previous paydowns.

ECJ ruling ‘credit negative’
The European Court of Justice has ruled that EU consumer law should be considered when deciding on the transparency of the sale of consumer mortgages linked to the IRPH index in Spain. The ECJ stated that there should be sufficient transparency during the sale of these mortgages to allow the average consumer to understand the method used to calculate the variable interest rate applicable to the loan and to evaluate the economic consequences of the index. In addition, the ECJ ruled that Spanish courts must judge on the transparency of the sale on a case-by-case basis. Moody’s notes that the move is credit negative for some RMBS transactions exposed to IRPH-linked mortgages, if such loans were to shift to a lower replacement rate, as this will result in a reduction of available excess spread. However, most exposed transactions are pre-crisis securitisations originated by ex-saving banks, with IRPH-linked mortgages typically representing 15%-40% of outstanding portfolios. Nevertheless, a shift to a lower rate would be positive for consumers, as lower instalments make it easier for borrowers to meet their payments.

EMEA
ICG has appointed Rob Faulkner as an md responsible for European CLOs. He will join ICG in June from Barings, where he has worked for 18 years - 15 of which were spent working with global head of credit fund management Zak Summerscale before he joined ICG in 2016. Faulkner is currently an md responsible for the management of Barings' European CLO platform.

North America
Quinn Barton has joined Greystone as cio of the commercial platform. He will oversee capital markets activities and capital deployment strategies, and will be involved in designing the overall blueprint for Greystone’s expanding CRE finance and investment activities. Barton joins Greystone from Carmel Partners, where he led origination of debt investments. This included B-pieces and distressed multifamily mortgages.

NPL trigger breach
Data from the first reporting period for the Gaia Finance Portuguese NPL ABS in November 2019 show that the deal’s cumulative collection ratio stands at 87%. JPMorgan international securitisation analysts note that this means the transaction has breached its trigger for an interest subordination event (set at 90%). As a result, a periodic interest shortfall (of circa €283,000) has accumulated on the class B notes of the transaction.