Sector developments and company hires

Hong Kong ILS pilot unveiled
The Hong Kong Insurance Authority has released details of the two-year Pilot Insurance-linked Securities Grant Scheme promulgated in the jurisdiction’s 2021-2022 Budget. The scheme provides an incentive for onshore and offshore issuers and sponsors to issue ILS in Hong Kong, while efforts are being made in parallel to map out a new regulatory regime for special purpose insurer vehicles.

Eligible issuances must be sized at least HK$250m-equivalent, with at least 20% of upfront issuance costs earned by local service providers. Priority will be given to first-time issuers and sponsors, as well as issuances lodged with and cleared by the Central Moneymarkets Unit operated by the Hong Kong Monetary Authority.

The sum of grant for each eligible issuance is the lesser of HK$12m or 100% of total upfront costs incurred for maturities of three or more years, or the lesser of HK$6m or 50% of total upfront costs incurred for maturities of up to three years.

In other news…

EMEA
Investec has appointed Megan Sachs as assistant portfolio manager for its Private Debt Fund I, with responsibility for co-ordination and management of the fund, alongside her existing role in the firm’s growth and leveraged finance team. Investec’s inaugural private debt fund was closed in December 2020 and is currently actively investing in European private debt solutions.

Additionally, the firm has added a further four staff to its growth and leveraged finance team: Finyin Inuayo, Rebecca Moss, Jack Moore and Lucian Purvis. They will focus on providing direct lending solutions to Investec's private equity clients and their portfolio companies.

The appointments follow the hire of Matthew Skingle, who joined Investec from HSBC’s leveraged finance team in December 2020.

Ruhi Patil has been promoted to managing associate in Linklaters’ London derivatives and structured products department. Specialising in credit derivatives and synthetic securitisations, Patil joined the firm in 2017. Before that, she worked at S&R Associates in Mumbai, India.

Landmark infrastructure ABS closed
Allen & Overy has assisted Société Générale, as original lender and arranger, in the securitisation of a portion of a loan granted to a leading Italian telecommunication company by a pool of banks comprising Société Générale and other financial institutions. The transaction is believed to be the first syndication of an infrastructure loan carried out through a securitisation vehicle. The deal involves both the acquisition of receivables arising from drawdowns already made and the direct lending by the securitisation vehicle of further funds pursuant to Law 130/99.

New workout strategy for ELIZA 2018-1
Mount Street has replaced CBRE as special servicer in relation to the Maroon loan, securitised in the Elizabeth Finance 2018 CMBS, pursuant to a special servicer replacement deed instigated by the controlling class D noteholders. The new special servicer is expected to temporarily suspend the sale of the underlying assets and try to implement asset management initiatives to improve and stabilise the portfolio’s net operating income, as well as wait for a likely pick up of the retail investment market following the anticipated ramp down of the coronavirus pandemic.

In October 2020, CBRE - after the exit strategy provided by the Maroon borrower was considered unsatisfactory - accelerated the loan and subsequently fixed charge receivers were appointed with the aim of disposing of the assets in a timely manner. The loan is in special servicing following the failure of the borrower to cure for a second time the 75% LTV covenant breach. CBRE had agreed to a standstill until the initial loan maturity in January 2021, as long as three months before maturity, the borrower provided a plan for repaying the loan in full.

The final note maturity is scheduled in July 2028, which should provide the new special servicer with sufficient time to work out the loan. Nevertheless, DBRS Morningstar has downgraded by a notch its ratings on the class C and D notes of the transaction. The trends on all classes of notes remain negative because of the challenges facing the UK retail sector, due to the economic consequences of the Covid-19 pandemic, as well as increasing competition from online sales.

North America
Jefferies Credit Partners (JCP) has expanded its capital formation capabilities and its investor relations team with the addition of two senior hires. Charles Byrne has been named global head of sales and capital formation, responsible for building and overseeing JCP’s investor relations, fundraising and global capital formation initiatives. He was previously co-head of US alternatives at RBC Global Asset Management/BlueBay Asset Management and has also worked at Regiment Capital Advisors and Marathon Asset Management.

Meanwhile, Andrew Gordon has been appointed head of strategic accounts and will focus his efforts on delivering the firm’s private credit solutions to strategic relationships across the globe. Gordon was previously co-head of US alternatives at RBC Global Asset Management/BlueBay Asset Management and has also worked at Marathon Asset Management and Bear Stearns.

Redding Ridge Asset Management has recruited Patrick McCarthy as a principal, based in New York. He was previously a vp at JPMorgan, having worked in asset management and treasury at NewStar Financial before that.

RMBS operational questionnaires enhanced
Fitch will begin distributing ESG-enhanced operational questionnaires as part of its US RMBS reviews from this month. The aim is to provide deeper insight into industry developments in its transaction presale and special reports, as well as in its originator/aggregator and servicer summary reports. The new questionnaires consist of open-form ESG items, including: company ESG strategy; originator/aggregator and servicer ESG policies; ESG impact assessments, including risks and opportunities; ESG reporting; and environmental impact.