Sector developments and company hires

No call for OATH 1
UK Mortgages and TwentyFour Asset Management have notified Oat Hill No. 1 bondholders that the RMBS will not be redeemed on its first refinancing call date of 27 May (SCI 22 April). TwentyFour says the transaction was not called as, due to the Covid-19 situation, financing markets were only available at relatively expensive levels that did not reflect the quality of the underlying portfolio. Despite a general improvement since April, the firm believes that better opportunities are likely in the months ahead. Oat Hill No. 1 is callable every quarter and conversations regarding the refinancing of the transaction are continuing.

In other news…

Call for expressions of interest
In order to clarify arrangements for prospective draws for interest forbearance and operational matters with regards to using the Forbearance SPV (SCI 28 April), the AOFM is seeking expressions of interest from SFSF-eligible lenders. Lenders submitting such an expression of interest should indicate: the number of related trusts expected to access the programme; the asset type and assets under management for each trust; the weighted average interest rate on assets for each trust; the number and volume of assets currently in Covid-19 hardship for each trust; and the number and volume of assets currently in 30-plus and 90-plus days arrears for each trust.  

Disclosure DTS clarified
ESMA has updated its Q&A document on the Securitisation Regulation, clarifying different aspects of the templates contained in the draft technical standards on disclosure. In particular, the document clarifies how several specific fields in the templates should be completed, including questions that are specific to fields in the ABCP template. The document also contains clarifications addressed to securitisation repositories. ESMA says it will continue to develop this Q&A on the Securitisation Regulation in the coming months and update it where required.

EMEA
Alantra has expanded its credit portfolio advisory (CPA) team with the appointment of Marcus Evans and Christos Stefanidis, who will join as mds in the UK and Greece respectively. Evans brings over 19 years’ experience in assisting clients deleverage credit portfolios and sourcing and optimising capital. He was until recently an FS deal advisory partner at KPMG, where he led the firm’s European FS deals network in its ECB office. Stefanidis previously worked for 16 years at PwC as a director in its deals/corporate finance team, focusing on financial services transactions, including non-performing loan sales and credit servicer carve-out transactions. Separately, Alantra has increased its global footprint by establishing dedicated CPA offices in Sao Paulo, Brazil and Shanghai, China. The former comprises two full-time senior advisors and a target size of five team members in 2020, while the latter consists of two professionals.

Juan Carlos Martorell has left Mizuho International, where he was md and co-head of structured solutions. Sources suggest that the bank’s appetite for origination in structured credit has diminished and, as such, it has reduced the headcount of the structured products solutions team by half. At Mizuho, Martorell executed internal and external landmark synthetic securitisation transactions totalling in excess of €1.5bn of tranches, such as: Gaudí for CaixaBank; Mespil for Bank of Ireland; and the first risk transfer for a Multilateral Development Bank (Room2Run). He is rumoured to be discussing opportunities with both the sellside and the buyside, remaining in structured credit more broadly.

Hertz bankrupt on missed payment
Hertz Global Holdings last week filed for Chapter 11 bankruptcy, following unsuccessful efforts to negotiate a restructuring of its lease obligations. Hertz relies on proceeds from vehicle sales, in addition to its normal operating cashflow, to service its ABS vehicle obligations. However, substantially weaker conditions in the used car market have caused Hertz's liquidity to become severely constrained. This led the company to miss a lease payment due on certain of its unrated ABS vehicle securities on 27 April. On 4 May, it entered into forbearance on these payments through 22 May. The bankruptcy filing ended the forbearance and limited waivers period regarding the lease payments, with S&P subsequently lowering its issuer credit rating and issue-level ratings on Hertz to single-D. S&P’s recovery ratings on the company's debt issues remain unchanged at this time because Hertz has yet to indicate its capital structure pro forma for the filing.

North America
Slate Asset Management intends to deploy up to C$500m of transitional capital to provide liquidity to the Canadian real estate industry, especially those impacted by the Covid-19-induced market disruption. Concurrently, Slate has appointed Doug Podd as md in its Toronto office. Podd joins the firm with more than 25 years of experience in commercial real estate lending and previously served as Canadian lead for Brookfield Financial's debt advisory business, where he directly placed in excess of C$4.5bn of real estate and infrastructure debt.

RFC on CRE approach
Scope Ratings has issued a request for comments regarding the publication of its CRE security and CMBS rating methodology. The proposed methodology offers an expected loss framework to analyse debt instruments secured by commercial real estate, including direct exposures to CRE securities or CMBS and CRE CLOs. The methodology focuses on an asset-specific cashflow analysis to assess a CRE security’s probability of default, its estimated recovery and the extent of any resulting expected loss. The methodology, as proposed, would have no impact on the ratings of outstanding transactions. Comments on the proposed methodology are invited by 30 June.