Sector developments and company hires

Iberian RMBS investment disclosed
The EIB has disclosed that it invested €50m in UCI’s latest RMBS, Prado VIII, aimed at promoting the renovation of existing residential buildings in Spain and Portugal, as well as the purchase of new near zero energy housing. The project is expected to contribute to climate change mitigation, delivering energy savings of almost 57GWh a year and cutting CO₂ emissions by 10,269 tonnes a year (equivalent to the annual energy use of 14,000 households). In addition, the projects financed by UCI with EIB support are expected to create around 940 jobs per year during the construction period.

This operation is the second partnership in 12 months between the EIB and UCI. The previous operation, worth €100m, was in connection with the Portguese Green Belém 1 RMBS from May 2020.

These green investments are part of UCI’s sustainable financing strategy for individuals and condominiums.

In other news…

Capital adequacy consultation underway
The Australian Prudential Regulation Authority has launched a consultation on proposed measures to enhance the capital adequacy of authorised deposit-taking institutions (ADIs). The consultation package includes a response paper and a revised draft standard, entitled ‘Prudential Standard APS 111 Capital Adequacy: Measurement of Capital’ (APS 111).

The revised draft standard is designed to: reinforce financial system resilience, with changes to the capital required to be held by ADIs for their banking and insurance subsidiaries; promote simple and transparent capital issuance, through the removal of complex issuance structures such as SPVs; and clarify various aspects of the standard, with additional technical information and updated guidance from the Basel Committee. APRA notes that the revised capital treatment of ADIs’ equity investments in their subsidiaries is the most material change to APS 111.

The revised draft standard also contains further minor revisions for consultation, including measures to clarify that CET1 capital is not permitted to have any unusual features that could undermine its role as the highest quality loss absorbing capital. 

The consultation period closes on 10 June. APRA expects to finalise changes to APS 111 in 2H21, with the revised standard coming into force from 1 January 2022. 

North America
Bain Capital Ventures has named Noah Breslow operator in residence, based in New York. He was previously chairman and ceo of OnDeck, and led the strategic process of the firm’s acquisition by Enova International (SCI 30 July 2020). Breslow was OnDeck’s first employee, joining the online lender in 2007 as svp, products and technology.

Income Research + Management has strengthened its client service team with two new recruits. Ken Johnson has been appointed svp and senior client portfolio manager, while Philip Machoka has been appointed vp and client portfolio manager.

Johnson has 20 years of experience in client relations at Loomis, Sayles and Company, where he was most recently vp, fixed income product manager. Earlier in his career, he was vp of business development at PNC Bank affiliate Investment Counselors Incorporated.

Machoka was previously md of investor relations at Garda Capital Partners, responsible for capital raising and business development from a global client base of institutional investors. Before that, he was an associate of business development and relationship management for BlackRock Investment Management’s Middle East and Africa institutional client business, based in London.

IR+M’s client service team is managed by Molly Manning, director of client service.

US CLO sensitivity scenario revised
Fitch says it will no longer include a near-term stress sensitivity scenario that notches down half of ratings with negative rating outlooks with a floor of triple-C minus in its analysis of US CLO notes. The application of the CLOs and corporate CDOs rating criteria adequately addresses default expectations, according to the rating agency.

Driving this change is the Fitch US corporate ratings team’s downgrading of fewer issuers with negative outlooks and recently lowering the 2021 default forecast for US leveraged loan defaults. However, the agency will continue to use the negative outlook notching sensitivity scenario - where half of ratings with negative outlooks are lowered one notch with a floor of triple-C minus - to inform rating outlooks for European CLO notes, considering the still-fragile macroeconomic backdrop and varying pace of vaccine rollout in the region. Any CLO note rating changes will be based on actual rating changes of the underlying issuers, as and when rating downgrades materialise.