Sector developments and company hires

CECL eligibility expanded
The FDIC, OCC and the US Fed have finalised a rule that allows institutions that adopt the current expected credit losses (CECL) accounting standard in 2020 to mitigate the estimated effects of CECL on regulatory capital for two years (SCI 31 March). Under the rule, eligible institutions have the option to mitigate the estimated capital effects of CECL for two years, followed by a three-year transition period. In a change from the interim rule, the final rule expands the pool of eligible institutions to include any institution adopting CECL in 2020.

North America
Michael Tamasco has joined Nassau Asset Management from Seix Advisors, where he was an md. In his new role, he will oversee global business development, enhance client engagement and champion the expansion of the firm’s third-party asset management platform.

SEMT junior tranches downgraded
Moody's has downgraded the ratings of 16 junior tranches and confirmed the ratings of two junior tranches from 12 Sequoia Mortgage Trust RMBS, affecting US$46m of securities. These transactions have a type of stop-advance feature, which can lead to a reduction in interest payments to the affected junior tranches (SCI 28 April). The current level of delinquencies in the underlying collateral due to the coronavirus outbreak has elevated the risk of such reduced interest payments that go unreimbursed.