Sector developments and company hires

IBA to consult on Libor transition proposal
The US Fed, the OCC, the FDIC and the UK FCA have welcomed a proposal by ICE Benchmark Administration (IBA), the administrator for Libor, that lays out a path forward in which banks should stop writing new US Libor contracts by end-2021 while enabling most legacy contracts to mature before the cessation of the benchmark. Under the proposal, IBA will consult this month on its intention to cease the publication of the one-week and two-month Libor settings immediately following the Libor publication on 31 December 2021, with the remaining Libor settings ceasing immediately following the Libor publication on 30 June 2023. The move is designed to facilitate an orderly wind-down of the benchmark.

IBA is separately consulting on its intention to cease the publication of all GBP, EUR, CHF and JPY Libor settings immediately following the Libor publication on 31 December 2021. IBA expects to close the consultations for feedback by end-January 2021.

In other news…

Acquisition
Blackstone is set to acquire DCI, a quantitative credit investing firm with approximately US$7.5bn in AUM across the global investment grade, high yield and emerging corporate credit markets. Based in San Francisco and led by a team of seasoned fixed income research professionals, the firm applies a proprietary, fundamental-based, technology-driven model to deliver differentiated returns to clients. The transaction will broaden Blackstone Credit’s capabilities in high yield and investment grade, enable the integration of DCI’s models and technology across the combined Blackstone Credit and DCI platforms and increase access to investors via a UCITs platform.

Aircraft financing partnership formed
Castlelake has formed a partnership with Boeing and its subsidiary Boeing Capital Corporation to provide financing solutions for new commercial aircraft deliveries. Through the partnership, Castlelake will seek to provide up to US$5bn of capital for new Boeing commercial aircraft deliveries via senior secured financing, mezzanine financing and high loan-to-value finance leases.

The firm will have full discretion over which transactions to pursue and the terms of those transactions. The term of the partnership is through 31 December 2022 and can be extended for an additional two years.

With an aviation team of more than 60 dedicated professionals across underwriting, finance, technical and other disciplines, Castlelake believes it can provide attractive, tailored capital solutions to aviation industry participants. The firm’s aviation lending strategy is led by partner Armin Rothauser, who joined last month from Starwood Capital, where he was an md and head of credit. Prior to that, he was md and co-head of structured credit at Deutsche Bank in New York and has also worked at Goldman Sachs, RBS Greenwich Capital and Morgan Stanley.

APAC
Hayfin Capital Management has opened a new office in Singapore, establishing a local presence in the Asia-Pacific region to capitalise on its investor base there. The Hayfin team in Singapore will be led by Glenn Clarke as head of Asia-Pacific. He will focus on building the firm’s Asian franchise while retaining his responsibilities as institutional portfolio manager.

EMEA
Alter Domus has recruited Boris Betremieux as head of successor agency and turnaround, Europe. In this newly created role, he will be responsible for managing an existing book of widely syndicated and restructured facilities and will also focus on expanding this new product line in Europe. Betremieux has over 15 years’ experience working across the debt financing and legal sectors, having joined from GLAS, where he managed all aspects of the Paris office. Previously, he was senior associate in the banking department of the London office of Ropes & Gray.

Euro CLO credit deterioration predicted
Credit quality will deteriorate for new European CLOs in 2021, but credit enhancement should help maintain strong performance among outstanding deals, according to a new report from Moody’s.

“While the credit quality of collateral continues to weaken into 2021, mirroring trends in the leveraged finance market, sector diversification will limit CLOs' exposure to hard-hit industries,” says Frank Cerveny, vp - senior research analyst at Moody’s. “CLO structures will become more flexible to better adapt to the Covid-19 market environment, with deal credit enhancement also helping to mitigate the risk of rising defaults.”

The report adds that collateral overlap across deals will increase as managers try to avoid issuers and sectors hit hardest by the pandemic, and amid an accelerated move toward ESG investment criteria. With an increase in speculative-grade corporate defaults and declining recovery rates across the leveraged finance market, individual CLO managers' skills gain in importance, Moody’s notes, and will lead to more differentiated CLO performance than in the past.

North America
Tikehau Capital has appointed Daniel Cruise as senior advisor. Based in New York and working alongside Gregoire Lucas, head of external relations, Cruise is tasked with expanding and institutionalising the firm’s outreach to key stakeholders. He will also be responsible for providing insights into geopolitical, public policy and ESG trends to help define and grow investment themes.

Cruise brings more than 20 years of experience working with policymakers and business leaders, having previously led the government and public affairs functions for Alcoa and Arconic. He has also worked as assistant Press Secretary at the White House and was part of the National Security Council staff. 

SME guarantee inked
The EIB Group has provided a mezzanine guarantee on a €330m portfolio of mainly Austrian loans to SMEs and mid-caps, originated by Hypo Vorarlberg Bank. With this financial support, Hypo Vorarlberg will expand its lending to households, SMEs and mid-cap customers for new highly energy-efficient residential buildings.

The operation is supported by the Investment Plan for Europe, under which the EIB and the European Commission are strategic partners to boost the competitiveness of the European economy. The transaction also underlines EIB Group's firm commitment in the field of synthetic securitisation in Austria to widen and diversify the scope of cooperation with a view to maximising its impact on the real economy.