Sector developments and company hires

The European Leveraged Finance Association (ELFA) has analysed coverage by three ESG data vendors for three debt indices - the CS Western European Leveraged Loan Index, the ICE BofAML Developed Markets High Yield Constrained Index and the BBG Global Aggregate Corporate Index – and found what it describes as “major discrepancies” in data coverage across asset classes. The research shows that leveraged loan coverage levels ranged from only 4%-10% across the three vendors, yet high yield coverage stood between 40%-79% and investment grade borrowers stood between 62%-95%. These figures also highlight the varying ranges of coverage between different vendors even within the same asset classes, ELFA notes.  

The association reports that although the supply of ESG data in leveraged finance is improving, it is not keeping up with investor demand – which it predicts will likely be “supercharged” as the Sustainable Finance Disclosure Regulation (SFDR) and other elements of the EU’s sustainable finance action plan come into effect. Further, ELFA reports that ESG disclosure lacks consistency and is often not presented in a user-friendly manner.

To make coverage by data providers easier, the association suggests that corporate borrowers should provide ESG disclosure in as public a way as possible and aim for disclosures that are comprehensive. Equally, investors should engage with borrowers on the disclosures they would like to see and encourage data vendors to increase coverage. Meanwhile, data vendors could adjust their methodologies to address the fact that leveraged finance borrowers tend to be smaller, while at the same time not compromising the integrity of their products.

In other news……

EMEA

AFME has named Shaun Baddeley as its new md of securitisation, following the retirement of Richard Hopkin. Baddeley brings over 18 years of experience to the role, having previously worked as md at Fitch Ratings and most recently serving as head of securitisation at Santander.

AlbaCore has announced the promotion of Deborah Cohen Malka to be the firm’s fourth partner. As former md and deputy portfolio manager, she will now work at the European credit specialist as partner and portfolio manager alongside the three founding partners at the firm. She has been with the firm since it was founded in 2016, and has played a major role in establishing the firm’s ESG strategy as well as leading on the firm’s developing CLO business. AlbaCore has also added ESG commitment member, Faatwima Diljore, to the firm’s investment committee. Additionally, the firm has promoted several new investment team directors - Armin Akhavan, Joe Alston, Helene Ba, Adriano Di Sandro, Itay Peer, and Alex Walkey.

North America

Angelo Gordon has announced the hire of Allison Binns, who will join the firm in the newly created role of head of ESG and Sustainable Investing Strategies. Binns will join the alternative investment firm from Morgan Stanley, where she served as executive director of Global Sustainability Research, and brings over a decade of ESG experience to the role. Binns will report to Angelo Gordon’s co-ceos, Josh Baumgarten and Adam Schwartz, as the firm seeks to enhance its strategic approach to ESG. Alongside the new hire, the firm has demonstrated its commitment to ESG across the platform by also becoming a signatory to the UNPRI.

Regions Bank has confirmed the completion of its acquisition of Sabal Capital Partners. Initially announced on 4 October, the agreement will widen the borrower audience of Sabal’s commercial real estate lending platform - following Regions’ strategy to acquire businesses which generate new opportunity while deepening relationships with existing clients. Sabal presently maintains a servicing portfolio of almost US$5bn, and since its inception has originated nearly US$6bn in financing. Regions hopes the introduction of Sabal to its Real Estate Capital Markets division will meet additional needs of both new and existing clients by enhancing the bank’s agency multifamily and non-agency lending capabilities. While the terms of the arrangement have not been disclosed, the acquisition does not include funds managed by Stone Point Capital or Sabal’s investment management business (which will remain with the sellers). The acquisition will see several members of Sabal’s leadership team join Regions; however, ceo Pat Jackson, cfo Mike Wilhelms, and cio Kevin McKenzie will remain with the investment management business.