Sector developments and company hires

Maritime financing facility agreed
Maritime and offshore alternative capital provider Fleetscape Capital has entered into an innovative financing structure with Macquarie that provides a more efficient offer to vessel owners seeking higher leverage situations. The structure utilises securitisation principles and enables Fleetscape to provide sale-and-leaseback or unitranche financing on competitive terms. Coupled with Fleetscape’s transaction execution capabilities and streamlined documentation, the facility is designed to enable mid-sized and smaller vessel owners and operators to raise innovative asset-backed financing beyond the capabilities of their existing banking relationships.

Eight tankers have already been financed via the new structure and it is anticipated that in the future the vehicle will also include exposures to container ships and bulk carriers. The total number of vessels financed is expected to rise to double figures this quarter, with growth further accelerating through 2021.

The small and mid-sized shipping segment has suffered from significant retrenchment from traditional commercial banks, resulting in many operators being underbanked.

In other news…

EMEA
SCOR has promoted Peter Nowell from global head of structuring - financial solutions to global head of financial solutions. Nowell joined the firm in 2015, having previously been head of ABS and ILS trading at BNP Paribas in London. Before that, he worked at RBS, Nordea, CDC IXIS and RBC.

Michel Büker has joined Willis Re in a dual role as head of Lloyd’s capital, Willis Re Specialty and head of production, customised solutions, EMEA. Büker will extend Willis Re’s relationships with the Lloyd’s sector and assist the Specialty team in developing bespoke solutions for clients. He joins from PartnerRe, where he was the ceo of the entity that provided capital to Lloyd’s syndicates.

North America
Allen & Overy has appointed Jake Mincemoyer as partner and head of its US leveraged finance practice, based in New York. Mincemoyer joins A&O from White & Case, where he served as regional section head of its Americas banking section. He has broad experience representing commercial and investment banks, as well as private credit funds and corporations in a wide range of leveraged and corporate finance transactions, including asset-based lending facilities, bridge facilities, debtor-in-possession (DIP) financings and restructurings. 

Richard Barrent has joined Compass Mortgage as svp - special projects. Previously, he was founder and president of mortgage consultancy Dux Advisory. He has also worked at SitusAMC and Wells Fargo Home Mortgage, as well as founding The Barrent Group in 2008.

Eagle Point Credit Management has recruited Seth Weinstein as director of business development, a newly created position where he’ll be responsible for strengthening the firm’s existing relationships in the institutional investment community. Based in Greenwich, Connecticut, Weinstein will report to Kyle McGrady, principal and head of marketing and investor relations. Prior to joining Eagle Point, Weinstein was svp of business development at CQS, having previously worked at HFR Asset Management, Man Investments, UBS Global Asset Management, BNP Paribas Asset Management and Bankers Trust.

Shadow banking study published
A new Bank of England Staff Working Paper, entitled ‘Banks, shadow banks and business cycles’, presents a theory that links investor sentiment to credit spreads via the non-bank financial sector. In the BoE model, shadow banks operate alongside commercial banks to produce standardised ABS, which investors – in purchasing them - perceive to be nearly as safe as traditional bank deposits. That, in turn, allows banks to expand lending by charging lower spreads.

In periods of stress, however, the ‘nearly’ qualification becomes crucial and the imperfect substitution between securities and deposits grows apparent. “Securities suddenly command a higher premium, enough to curtail the capacity of shadow banks to engage in securitisation. This spills over to commercial banks: no longer able to offload part of their portfolio at the same price, they resort to increasing spreads on consumers and businesses alike,” the paper observes.

As spreads rise, credit becomes dearer. Indebted households must cut back on goods and housing purchases. Indebted firms must cut back on capital purchases. Employment, consumption and investment fall as a result, causing a recession. “Thus, a drop in investor confidence - we call it a market sentiment shock - produces strong and positive co-movements among the main macroeconomic variables, credit quantities and asset prices, as well as countercyclical movements in household and business credit spreads,” the paper concludes.