Sector developments and company hires

APAC fund launch
Pierfront Capital Fund Management has been awarded its capital market services license for fund management by the Monetary Authority of Singapore. It has also announced the first close of the Keppel-Pierfront Private Credit Fund, which aims to provide debt solutions to corporates or projects predominantly in the real asset sectors of the Asia-Pacific region. Sponsored by Pierfront Capital Mezzanine Fund (PCMF) and Keppel Capital, each has committed US$100mn in the first close of the fund. PCMF is 90.91% and 9.09% held by Temasek and Sumitomo Mitsui Banking Corporation respectively. Keppel Capital acquired a 50% stake in Pierfront Capital from PCMF in November.

Aussie ABS support fund
The Australian Office of Financial Management (AOFM) has launched an A$15bn Structured Finance Support Fund, under which it will invest in Australian dollar-denominated rated primary market securitisation positions issued by smaller authorised deposit-taking institutions and non-ADI lenders, alongside securitisation warehouse financings over a 12-month period. The aim is to enable customers of smaller lenders to continue to access affordable credit amid the spread of coronavirus. The funding will complement the Reserve Bank of Australia’s A$90bn term funding facility for ADIs that will also support lending to SMEs. The AOFM is expected to be able to begin investing in ABS and RMBS by next month.

Basel timeline extended
The Basel Committee has endorsed a set of measures to provide additional operational capacity for banks and supervisors to respond to the immediate financial stability priorities resulting from the impact of coronavirus on the global banking system. The implementation dates of the Basel 3 standards, the accompanying transitional arrangements for the output floor, the revised market risk framework and the revised Pillar 3 disclosure requirements have been deferred by one year to 1 January 2023, 1 January 2028, 1 January 2023 and 1 January 2023 respectively. The revised timeline is not expected to dilute the capital strength of the global banking system, but should provide banks and supervisors additional capacity to respond immediately and effectively to the impact of Covid-19.

Notice of default
The Elizabeth Finance 2018 CMBS servicer has obtained an updated valuation of £68.9m in respect of the Maroon loan properties (SCI passim), which represents a decrease of £17.1m when compared to the previous valuation in January 2019. Based on the updated valuation, the Maroon LTV is 96.4%, whereas the Maroon obligors are obliged to ensure that the LTV does not exceed 75%. As such, a notice of default dated 17 March 2020 was served on the Maroon obligors providing a period of 15 business days to cure the default.

SBOLT ratings watch
KBRA has placed three classes of Small Business Origination Loan Trust 2018-1 on ratings watch developing and four classes of SBOLT 2019-1 on watch downgrade, due to the economic effects of coronavirus. The agency expects the two marketplace lending securitisations to be negatively impacted by Covid-19 containment measures in the UK, after conducting a hypothetical scenario analysis that considered stresses to default levels.