Sector developments and company hires

Pre-pandemic trends persist for US CLOs
Pre-pandemic trends in US leveraged lending - including high leverage, weak covenants and declining recoveries - resumed by 3Q20 and should continue into 2021, absent a renewed downturn, according to Moody’s. Consequently, the agency expects that in 2021 US CLOs will include structural features for maintaining loan workout and trading flexibility to help manage assets under stress.

“We expect speculative-grade defaults to continue to rise through the first quarter of 2021 and decline thereafter, putting a focus on managers' options to minimise losses on defaulted or stressed assets and manoeuvre around OC test thresholds,” Moody’s says. “As long as economic conditions and collateral metrics continue to improve though, bolstering investor confidence and tightening CLO spreads, new CLO issuance volume will likely increase moderately.”

In other news…

Dutch guarantee signed
Dutch National promotional institution Invest-NL has signed a new guarantee agreement with the EIF to cover a lending portfolio to innovative Dutch SMEs. As a result of this agreement, Invest-NL will be able to provide up to €66m in loans under 10 new operations to innovative SMEs.

The loan guarantees are provided by the InnovFin SME Guarantee Facility under the EU Framework Programme for Research and Innovation Horizon 2020, launched by the European Commission to improve access to finance for innovative SMEs and midcaps. The agreement falls under the InnovFin SMEG COVID-19 Support Measures enabled by a top-up from the European Fund for Strategic Investments (EFSI).

EMEA
ARA Venn has recruited Oriane Auzanneau to lead loan investments for its social housing strategy as a director and deputy portfolio manager. She joins from M&G Investments, where she spent 12 years involved in corporate lending and was a director in its social housing team.

North America
Alston & Bird has deepened its structured and warehouse finance capabilities with the addition of a three-lawyer team from Cadwalader. Joining the firm’s New York office are partners Joseph Gambino and Peter Williams, who have worked together as a team for nearly 10 years and have extensive experience in the post-crisis market for CLOs and other structured products. Also arriving as part of their team is associate Elizabeth Walker, who focuses her practice on structured finance transactions, with an emphasis on CLOs.

Newmarket Capital has hired Thierry Adant as cio, responsible for leading the firm’s investment process, shaping its strategy and developing new pathways for institutional investors to gain access to innovative and impact-oriented alternative investments. Adant joins Newmarket from Willis Towers Watson, where he was head of private debt and a member of the alternative credit fund investment committee. During his tenure at Willis Towers Watson, Adant designed innovative investment solutions amounting to more than US$4bn per annum, including a number of impact investments.