Sector developments and company hires

EIF calls for guarantee applications
The European Commission has unlocked €1bn from the European Fund for Strategic Investments (EFSI) that will serve as a guarantee to the EIF and allow it to issue special guarantees to incentivise lenders to provide liquidity to at least 100,000 European SMEs and small mid-cap companies hit by the economic impact of the coronavirus pandemic, for an estimated available financing of €8bn. The move is part of the package of measures announced by the EIB Group designed to rapidly mobilise support for Europe’s SMEs and mid-caps (SCI 18 March). The guarantees will be offered through the EIF to the market, via a call for expressions of interest issued to several hundred financial intermediaries, comprising banks and alternative lenders. Key features of these guarantees include: a higher risk cover of up to 80% of potential losses on individual loans (as opposed to the standard 50%); a focus on working capital loans across the EU; and allowing for more flexible terms, including postponement, rescheduling or payment holidays. SMEs will be able to apply directly to their local banks and lenders participating in the scheme, which will be listed on www.access2finance.eu.

In other news…

Acquisition
Peak Reinsurance Company is set to acquire 100% of the capital of Lutece Holdings and its subsidiary ILS asset manager Lutece Investment Management. Lutece will provide Peak Re with a platform for expanding its ILS product suite – in particular, Asian risk exposures - and will be renamed Peak Capital. The transaction is expected to close in the coming weeks, subject to regulatory procedures.

Basel 3 impact measured
The EBA has published a report measuring the impact of implementing the final Basel 3 reforms and another report that monitors the current implementation of liquidity measures in the EU. Being based on June 2019 reporting date, these results do not reflect the economic impact of the coronavirus disease on participating banks. Overall, the EBA estimates that the Basel 3 reforms, once fully implemented in 2028 after the additional delay of one year agreed by the Basel Committee, would determine an average increase by 16.1% of EU banks' Tier 1 minimum required capital. The liquidity coverage ratio of EU banks, which was fully implemented in January 2018, stood at around 147% on average in June 2019.

North America
Jason New has joined Onex Credit as co-ceo, leading the platform with Stuart Kovensky. New will also be responsible for new strategies in opportunistic credit and special situations. He was previously a senior md of Blackstone and co-head of distressed and special situation investing for GSO Capital Partners, having been an original partner of GSO and a member of its management committee and investment committee.