Sector developments and company hires

CSS refocuses on GSE MBS issuance
Common Securitization Solutions (CSS) is undertaking a series of actions to better align its corporate governance structure with its core mission of supporting the infrastructure for Fannie Mae and Freddie Mac MBS issuance. Matthew Feldman has been named chairman of the board of managers at CSS to assist in this transition on an interim basis.

In early 2020, the FHFA explored expanding the role of CSS to serve a broader market. After a nearly two-year review, the FHFA determined that CSS should instead focus on maintaining the resiliency of the GSEs’ MBS platform.

This decision allows CSS to remain focused on the safety and soundness of the housing finance market and reduce unnecessary expenses as the GSEs rebuild capital. As a result, the independent members of the board of managers brought on as part of the CSS market expansion activity have left the board. However, Anthony Renzi will remain as ceo of CSS and member of the board.

Feldman served as president and ceo of the Federal Home Loan Bank of Chicago from April 2008 until December 2020, after serving in several executive capacities at the bank since starting in 2003, including cro and evp, operations and technology. He was previously president of Continental Trust Company, a wholly-owned subsidiary of Continental Bank, and served in a number of other roles in capital markets, investments and general management during his 15 years there.

EMEA
Asha Narayan has joined Hayfin Capital Management’s European high-yield and syndicated loans investment team as portfolio manager, European CLOs. Based in London, she will report to Gina Germano, portfolio manager and head of the European high-yield and syndicated loans team.

Narayan previously served as CLO portfolio manager at PGIM. Before that, she worked for 14 years at Deutsche Bank, where she was largely focused on sales.

North America
Sweta Chanda has joined Monroe Capital as md, head of business strategy, based in New York. She will be responsible for firmwide strategy, product and corporate development, as well as new initiatives to expand Monroe’s global footprint.

Chanda was previously a director at New York Life Investment Management (NYLIM), responsible for heading alternative investment strategy, where she helped launch a European CLO platform and a social impact fund, among other growth opportunities. She has over 18 years of experience in asset management and has also served at Blackstone, Lehman Brothers and Starpoint Solutions.

Red 2 mezz upgraded
Scope has upgraded tranches C through E and affirmed three other tranches (A, B and F) issued by Santander’s Red 2 Finance CLO 2018-1, a synthetic securitisation of commercial real estate loans. Tranche C has been upgraded to triple-A from double-A plus, tranche D to triple-A from double-A and E to single-A from triple-B plus.

Red 2 references a static £776.9m portfolio (£2.79bn at closing) of 223 commercial real estate loans (837 loans at closing). Sequential amortisation coupled with limited realised portfolio losses have increased credit enhancement since closing as follows: tranche A (60.4% from 18%), tranche B (46.9% from 14.3%), tranche C (31.7% from 10%), tranche D (24.5% from 8%), tranche E (14.8% from 5.3%) and tranche F (6.6% from 3%).

As of July 2021, there were only £33.8m of defaulted assets (representing 4.5% of the total reference pool outstanding balance) and £12m (1.5%) of losses in the reference portfolio. Additionally, as of the July 2021 reporting, there were 37 exposures (£107.3m) on Santander’s internal monitoring list, six of which (£44.6m) the bank considers non-performing.

The portfolio’s average interest coverage ratio is down to 2.65x from 2.96x at inception, while the weighted average LTV ratio has improved to 43.3% from 47.6%.