Sector developments and company hires

Affordable housing UMBS planned
Freddie Mac plans to offer at least US$3bn in single-family affordable housing bonds, including approximately US$285m in Uniform Mortgage-Backed Securities backed by loans purchased through its Home Possible programme. The Home Possible mortgage offers a 3% down payment solution, which helps very low- to low-income potential homebuyers overcome the leading barrier to homeownership: affording a down payment. Other benefits of the programme include: lower mortgage insurance coverage requirements; reduced credit fees; and flexible sources of down payments.

Home Possible mortgages are only available to families with income at or below 80% of area median income. Freddie Mac purchased over 81,000 Home Possible mortgages in the first six months of 2021 and has made homeownership possible for more than 623,000 families through US$121bn in Home Possible mortgages since 2015.

Electric bike ABS debuts
Scope Ratings has published a final rating of triple-B minus to the lessee payment contingent fixed rate notes issued by Debt Marketplace - Compartment B, a cash securitisation of an up to €105.55m portfolio of electric bike lease receivables originated by Hofmann Leasing, with a corresponding total issuance amount of up to €100m. The receivables comprise German and Austrian lease instalments and the associated assets’ residual value.

The underlying assets will be pooled and allocated to a note over an issuance period of up to nine months with periodic taps by Debt Marketplace, acting through its compartment B. The lessee pays monthly installments, based on a lease factor on the net purchase price, plus the mandatory insurance fees and any additional optional insurance payments. The transfer value of receivables is based on an initial discount rate, which shall be adjusted downwards by 75bp if the operational servicer receives an issuer credit rating of at least satisfactory credit quality from Scope.

The transaction features an amortisation schedule for the fixed rate notes and adjusts for the level of cumulative observed defaults and remaining length of the amortisation period. These principal payments on the note are payable after the end of the issue period in April 2022. The fixed coupon rate on the notes is 1.25% per annum.

KKR transition underway
KKR has appointed Joe Bae and Scott Nuttall as co-ceos, with co-founders Henry Kravis and George Roberts remaining actively involved as executive co-chairmen of the firm’s board. The leadership transition is effective immediately.

Bae and Nuttall are the KKR’s second pair of co-ceos. They both joined the firm in 1996 and have served as co-presidents and co-coos since July 2017.

Bae was the architect of KKR’s expansion in Asia, building one of the largest and most successful platforms in the market. In addition, he has presided over business building in the firm’s private markets businesses.

Nuttall was the architect of KKR’s major strategic development initiatives, including developing the firm’s balance sheet strategy, overseeing the development its public markets businesses in the credit and hedge fund space, as well as the creation of the firm’s capital markets, capital raising and insurance businesses.

Concurrent with the elevation of Bae and Nuttall, KKR has unveiled a series of what it describes as “transformative structural and governance changes”. First, in a transaction expected to be completed in 2022, KKR will combine with KKR Holdings. Second, on 31 December 2026 - subject to exceptions that would accelerate this date - KKR will eliminate its controlling Series I preferred stock and also acquire control of KKR Associates Holdings.

Nordic trustee acquired
Ocorian has acquired Nordic Trustee, a provider of trustee and agency services for bonds and direct lending in the Nordic region. Nordic Trustee will continue to be led by ceo Cato Holmsen and an experienced management team, with offices in Oslo, Stockholm, Copenhagen and Helsinki.

Since it was founded in 1993, Nordic Trustee has helped develop the Nordic bond market, facilitating issuer access to capital, as well as monitoring and securing bondholders’ rights. It is also the largest independent loan agent in the growing Nordic private credit market and supports various stakeholders in the bond and private loan markets with digital solutions.

The company has over 3,000 running assignments in the non-bank lending sector for more than 850 issuers and borrowers from 30 countries. Furthermore, the company provides bond reference data, pricing information and indexes to institutional investors through its proprietary platforms Stamdata, Nordic Bond Pricing and eFIRDS.