Sector developments and company hires

UKML tender offers mooted
Coventry Building Society subsidiary Godiva Mortgages is set to purchase from UK Mortgages Corporate Funding two buy-to-let mortgage portfolios originated by Godiva and currently financed within the Cornhill No. 6 and Malt Hill No. 2 RMBS vehicles. Subject to successful completion, the timing of these sales is expected to coincide with the transactions’ payment dates in February and May 2021 respectively.

The move is part of UK Mortgages’ strategy to free up capital, to enable capital to be returned to shareholders by way of a tender and to fund a second Keystone BTL loan investment. This follows a shareholder vote in December in favour of an updated strategy for UKML.

The first objective under the strategy was achieved last month through the successful securitisation of existing Keystone BTL loans in the inaugural Hops Hill No. 1 transaction.

TwentyFour Asset Management has mandated a warehouse provider for the second Keystone investment and has commenced documentation work with an expectation of completing during March.

The sale of the two Coventry portfolios is expected to release capital enabling two tenders to be carried out, returning an aggregate at the higher end of a £35m-£40m range. These tenders are expected to take place following the February and May payment dates at 75p per share.

In other news…

Direct lending JV formed
Bain Capital Specialty Finance (BCSF) has formed a joint venture with the private credit business of Pantheon, to provide private direct lending solutions to middle market borrowers primarily across Europe and Australia. The joint venture will invest through the International Senior Loan Program (ISLP), in which BCSF and Pantheon have agreed to purchase equity interests.

The equity ownership of ISLP is expected to be approximately 70.5% for BCSF and approximately 29.5% for Pantheon, with investment decisions requiring approval by representatives of both firms. ISLP’s investment portfolio is expected initially to consist of approximately US$320m in investment principal of senior secured loans contributed by BCSF.

The strategic partnership is expected to provide BCSF with enhanced balance sheet flexibility to expand its global capabilities and greater capacity to continue to invest in new senior secured loan investments to middle market companies. The transfer of the initial portfolio to ISLP is expected to occur by end-February.

North America
Pagaya has hired Peter Silberstein as head of capital development. Silberstein joins from Figure Technologies, where he was head of capital markets, leading the capital markets division and managing the company’s funding and execution strategies. He previously held roles at Social Finance, Goldman Sachs and Morgan Stanley. Pagaya is expanding into point-of-sale products, credit cards and single-family rentals.

NPL marketplace promoted
Italy’s Unione Nazionale Imprese a Tutela del Credito (UNIREC), the national union of credit protection enterprises, and Debitos have signed an agreement aimed at providing a marketplace for non-performing loans to companies in the sector. The number of investors registered on the platform is already more than 1,000, representing €21bn of capital.

Under the agreement, Debitos will be presented to all UNIREC member companies that provide multiple services - including commercial information, collection and purchase of credits - and which may decide to use the platform as a seller, buyer or arranger of NPL transactions. The association brings together about 200 companies and almost 17,000 professionals, representing 80% of the Italian credit management market.

The total positions managed by UNIREC members amounted to approximately €132bn in 2019, 81% of which were credits originated in the banking or financial sector, about 11% to the utility and telco sector and only 2.5% to trade receivables.