Sector developments and company hires

FTB RMBS hits the market
An unusual UK prime RMBS has hit the market. Blitzen Securities No.1 is backed by a pool of owner-occupied mortgages extended to first-time buyers (FTBs) with original LTVs between 85% and 95%, originated by Santander between 2014 and 2020.

An undisclosed investor acquired the pool from Santander through a bidding process and will sell the assets to the issuer. Santander will retain 5% of a randomly selected portion of the portfolio.

The portfolio amounts to approximately £605m, as of the 30 June 2021 pool cut-off date, and has a weighted average seasoning of 22 months. Self-employed borrowers account for 16.8% of the pool, which is higher than typical prime residential portfolios from high street lenders.

Fitch and Moody’s have assigned provisional ratings to the transaction. Fitch notes that the weighted average current LTV is higher than average for RMBS it rates, at 88.1%. Fitch’s WA sustainable LTV is also high at 115.1%, resulting in a higher-than-average foreclosure frequency and lower recovery rates than transactions with lower LTV metrics.

Further, the agency considers that FTBs are more likely to suffer foreclosure than other borrowers and has considered their concentration in this pool analytically significant. Consequently, in a variation to its criteria, Fitch has applied an upward adjustment of 1.3x to each loan.

At closing, the total credit enhancement for the class A Notes is 16.5%, provided through subordination and an amortising split reserve fund, which will be funded to 1.5% of the mortgage portfolio balance at closing.

BofA Securities is arranger on the deal, as well as joint lead manager with Santander.

In other news…

EMEA
RBC has named John Miles head of European alternatives and private capital solutions, based in London. Miles was formerly an md at Citi for over 15 years, leading a team of structured credit specialists dealing with all aspects of financing and investing across the European securitisation market. He left the bank in December 2019 and had short stints at Imperial Capital and AA Advisors, before joining RBC.

North America
Hilltop Securities has expanded its Southern Region public finance group with the addition of Tom Baurle, who will serve as md, investment banker in debt capital markets in the firm’s Naples, Florida office. Baurle will focus on ABS, private debt originations and structured finance strategies for clients across a wide range of sectors. He has more than 30 years’ experience in the structured finance space and previously served as md of investment banking and structured finance at Oak Ridge Financial.

JPMorgan Asset Management has strengthened its private credit platform with the appointment of Vincent Lu and Brian Van Elslander as co-heads of the newly formed global performing credit group. The pair bring extensive experience in private credit and private equity sponsor coverage to the roles and will report to Meg McClellan, head of private credit at JPMorgan Private Capital. Global performing credit will initially target opportunities in the direct lending segment, with plans to expand into other private credit strategies in the future.

Lu joins JPMorgan Global Alternatives with more than 20 years of private credit experience, most recently serving as co-head of private strategies at Wells Fargo Asset Management. Prior to that, he spent 18 years at Blackstone/GSO Capital Partners in private credit and was involved in the firm's performing credit and stressed/distressed investing funds.

Van Elslander previously served as co-head of private strategies at Wells Fargo Asset Management. Prior to this, he spent more than 10 years as md and head of the financial sponsors group at Wells Fargo Securities. Earlier in his career, he was an md of the financial sponsors group at Credit Suisse and a vp at JPMorgan in the leveraged finance and high yield capital markets groups.