Sector developments and company hires

GSE Patch to end
Fannie Mae and Freddie Mac have announced that any loans purchased after 1 July must meet the standards set out in the most recent amendments to the Preferred Stock Purchase Agreements, which stipulate that the GSEs will only purchase qualified mortgage loans that meet the new general ATR/QM Rule. The move effectively ends the use of the temporary GSE qualified mortgage rule (the ‘GSE Patch’). However, these guidelines contravene the CFPB’s most recent notice of proposed rulemaking, which proposed delaying the mandatory compliance date of the revised QM rule until 1 October 2022 (SCI 4 March). 

In other news…

Call for green standardisation
Uniform standards - including a clear green asset definition and a minimum percentage of green assets in a pool for securitisations to be classified as green - would lead to broader investor confidence and participation in the market, Fitch says. Any regulatory capital or similar incentives for green securitisations should also include grandfathering for securitisations that could cease to be considered green, due to the evolution of green standards in order to prevent a sudden impact on deal pricing and liquidity (SCI 12 March 2020).

Fitch notes that the ESG aspects of a securitisation may be positive or negative for the ratings. The agency says it does not apply an analytical adjustment in its credit analysis based on the green features of these transactions, as it would want to see improved and more granular historical data showing differences in cashflow and collateral performance between green and non-green assets.

Some transactions are green by nature, such as wind, solar or PACE ABS. Other transactions - such as auto ABS, RMBS, CMBS and CLOs - can be considered green, depending on specific asset attributes or use of proceeds.

Meanwhile, green RMBS are generally backed by mortgage loans for properties with energy-efficient features, although there is still a lack of standardisation in energy efficiency requirements for residential property within and across jurisdictions. Fitch views some green building features as potentially credit positive for CMBS, helping support occupancy and property value over time.

CRE JV agreed
Avant Capital Partners has formed a programmatic commercial real estate joint venture with an undisclosed Connecticut-based investment management platform with assets under management in excess of US$10bn. The platform is an active investor across several credit strategies, including real estate debt, and has tapped Avant to originate, underwrite, close and manage loan investments from US$5m to US$75m on a nationwide level.

The JV will originate bridge loans secured by property types that include multi-family, light industrial, warehouse, office and select hospitality and retail. The loan programme is designed to finance properties that are being repositioned, newly constructed and in lease-up phase, improved or otherwise redeveloped, or need a quick close.

Each loan will be underwritten to a clear exit strategy through conventional bank, agency or CMBS refinance.

EMEA
Fairwater Capital has hired Eric de Sangues as head of structured credit, responsible for the strategic development of credit strategies alongside his role as fund manager, reporting to cio and founding partner Orlando Gemes. Sangues has had a 20-year career in investing focused on macro credit trading, relative value, index tranches and options, where he utilised his engineering background to develop proprietary investment tools to extract value. He was most recently a senior portfolio manager at Chenavari Investment Managers, responsible for cross-asset trading, credit relative value and structured credit investing.

North America
Allianz Global Corporate & Specialty (AGCS) has promoted David Brown, currently the firm’s head of insurance-linked markets, to head of its capital solutions unit effective from 1 July. He succeeds Richard Boyd, who is leaving Allianz and moving back to the UK from Bermuda for family reasons.

Brown joined Allianz Risk Transfer in 2007 and became head of insurance linked markets in 2015, after which he was appointed president of Allianz Risk Transfer (Bermuda) in 2020. Prior to AGCS, he spent his early career at Marsh, where he focused on structuring alternative risk transfer and captive solutions.

Monroe Capital has recruited Jayro Yoo as director, serve on its marketing and investor relations team based in Texas. Prior to Monroe, Yoo was a vp at DWS Asset Management, where he focused on raising capital for the firm’s alternative investment platform. He has also served at MainStay/New York Life, Wells Fargo Global Alternative Investment Services and Salient Partners.