Sector developments and company hires

Californian auto loans eyed
The Westlake Automobile Receivables Trust 2020-2 issuer has disclosed that the state of California is considering new legislation - Assembly Bill No. 2501 (AB 2501) - that could significantly impact auto loan securitisations with high concentrations of Californian loans. S&P notes that in its current form, if this legislation is enacted, it could require servicers of the auto loan contracts to not repossess vehicles during the Covid-19 emergency and for an additional 180-day period following the emergency.

If requested by borrowers, the servicer may also be required to provide forbearance on the auto loan for at least 90 days, which could be extended for up to a cumulative total of 270 days. While in the forbearance period, the interest that could be charged to the borrower would be capped at 7%.

In other news…

CLO credit deterioration to continue
The credit quality of many US and European BSL CLOs will likely deteriorate over the coming months as asset defaults increase, although credit conditions as reflected in negative rating actions on corporate issuers are stabilising, according to a new report from Moody's. The default risk of assets in many CLOs - as measured by WARFs - has increased, while other performance metrics such as OC ratios have deteriorated in recent weeks.

“The weakening in asset quality has led to increased risks for CLO liabilities, prompting us to place additional CLO securities on review for downgrade, including a small number of securities in the US at the single-A and double-A rating levels. The weakening trend in credit quality is likely to slow, however, as credit conditions stabilise and corporate rating actions continue to taper off,” Moody’s says.

EMEA
Christos Danias has joined Fair Oaks Capital as principal, based in London. He was previously an md in ABS and CLO sales and origination at StormHarbour and before that, worked at Cantor Fitzgerald and BNP Paribas among other securitisation roles.

NewDay redemption
NewDay Cards has confirmed that it does not intend to exercise its option to extend the NewDay Funding Series 2017-1 scheduled redemption date. The firm says the move reflects current funding market conditions and the strength of the liquidity position in the NewDay Funding master trust, as well as the NewDay group as a whole. As such, it is expected that the Series 2017-1 notes will be redeemed on 15 July. The redemption will be funded by drawings under the existing committed senior variable funding loan notes issued by NewDay Funding Loan Note Issuer.

North America
AIG has appointed Paschal Brooks as ceo of AlphaCat Capital, an AIG company that provides investment advisory services in the ILS markets. Brooks oversees the implementation of ILS strategies and was previously coo of AlphaCat. Brooks now reports to Chris Schaper, ceo, AIG RE.

Mount Street Group has named Kirsten Glaser senior director, head of debt advisory, based in Atlanta, Georgia. She was previously md and head of capital advisory at Rivercrown Group in London, and has also worked at JLL.

Jimmy Levin will succeed Robert Shafir as ceo of Sculptor Capital Management, effective 1 April 2021. Levin is also expected to be elected to Sculptor Capital’s board at its annual meeting of shareholders on 24 June. He will continue to serve as the firm’s cio and executive md, while providing day-to-day leadership and management of its 109 investment professionals and investment portfolios worldwide. Levin is a member of the firm’s partner management committee and its portfolio committee. Prior to joining Sculptor Capital in 2006, he was an associate at Dune Capital Management and an analyst at Sagamore Hill Capital Management.