Sector developments and company hires

Spanish private debt fund wins EIF backing
Beka Finance has formed a private debt management unit, dubbed Beka Credit, which it hopes will help consolidate the firm’s growth and leadership position in the alternatives market. The unit is already preparing to launch its first private debt fund, with which it expects to raise around €250m.

The Luxembourg-based vehicle will grant senior loans with a maturity of around six years to Spanish companies. The firm estimates that the leveraged return could reach 15%.

Beka Credit has obtained the support of the EIF, which will provide a guarantee to the new vehicle.

Lars Schmidt-Ott leads the Beka Credit team as managing partner in Madrid, while Jerónimo Sánchez joins as director of origination and business development, Manuel Acevedo as credit director, Víctor Menéndez as structuring director, and José Luis Riera as finance and operations director. Julieta Garretano and Luis Torroba also join the unit, from Finalbion and Be-Spoke Capital respectively.

Schmidt-Ott was previously founder of Be-Spoke Capital and before that co-founded Capital Efficiency Group, having also worked at The Boston Consulting Group and Swiss Re Financial Services. Sánchez was most recently director of distribution of the commercial banking network in Spain and territorial director of Madrid at Santander Group.

Acevedo was also previously at Santander Group, as an md in its corporate and investment banking unit. Another Santander alumnus, Menéndez has extensive experience in leading both structured finance operations and highly specialised finance teams, most recently as an advisor to fintechs. Finally, Riera has been the financial director of the Gedesco group and previously of the Celistics Group.

The team plans to recruit a further 13 professionals before the end of the year and 18 towards the end of 1Q21.

In other news…

Clifden targets further RMBS issuers
The Great Hall Mortgages No. 1 Series 2006-1, 2007-1 and 2007-2 issuers have disclosed their receipt of an email from a Clifden Group account, containing a letter from Cherry Services notifying them of the appointment of four “investor directors”, having purportedly served notices on the issuers on 18 October 2021. On 20 October, having purportedly given notice, these directors apparently held board meetings to call up the unpaid share capital of the issuers and required the existing shareholders to make payment by 10 November 2021.

On 12 November, a purported forfeiture notice was allegedly served on the shareholders for not complying, giving the shareholders until 3 December 2021 to comply. On 7 December, an alleged board meeting was held at which partly paid shares of the issuers held by the shareholders were forfeited and purportedly sold to FVS Investments, allegedly meaning that FVS was now the majority shareholder.

Notices dated 10 December, apparently signed by FVS, then alleged to have: removed Mark Howard Filer and Law Debenture as directors of the issuers; removed Law Debenture as the secretary of the issuers; and replaced Law Debenture as the corporate servicer with Cherry Services.

The issuers have subsequently confirmed that none of the “investor directors” are or have ever been a director and therefore no forfeiture, sale or transfer of any shares has occurred. Thus, FVS is not a holder of any shares in the issuers.

Additionally, the issuers warn that the “investor directors” or those acting on their behalf may attempt to carry out further invalid actions purportedly by or on behalf of the issuers.  

The Clifden email also enclosed a claim form from the Commercial Court in London on 13 December, purportedly issued by Great Hall Mortgages No. 1 and Cherry Services. The defendants were listed as Law Debenture and Mark Filer, but the issuers deny authorising the claim. The issuers have appointed lawyers to take action in relation to these matters.

EMEA
Scope has appointed Matthias Böhm as its new md in a move to strengthen its leadership. Böhm is a certified compliance officer and has served in several senior management roles within the European financial industry, including as md of German operations at Rabobank. He will serve on the management board alongside Scope Group coo, Guillaume Jolivet, and will be based in Frankfurt.

GSE capital plans mooted
The FHFA has issued a proposed rule that would require Fannie Mae and Freddie Mac to develop, maintain and submit annual capital plans. This requirement aims to help protect taxpayers by ensuring that the GSEs properly assess their risks and maintain the appropriate level of capital.

The proposed rule mandates that the enterprises' capital plans include: an assessment of the expected sources and uses of capital over the planning horizon; estimates of projected revenues, expenses, losses, reserves and pro forma capital levels under a range of internal scenarios, as well as under FHFA's scenarios; a description of all planned capital actions over the planning horizon; a discussion of how the enterprise will, under expected and stressful conditions, maintain capital commensurate with the business risks and continue to serve the housing market; and a discussion of any expected changes to the business plan that are likely to have a material impact on their capital adequacy or liquidity. The proposed rule also incorporates the determination of the stress capital buffer into the capital planning process.  

Separately, President Biden has nominated Sandra Thompson to serve as director of the FHFA. The Structured Finance Association welcomed the appointment by noting that during her tenure as acting director, Thompson demonstrated a commitment to FHFA’s housing mission, prioritised the safety and soundness of the GSEs and engaged with industry on a number of important issues - including the capital treatment of the credit risk transfer market.

North America
Caroline Chen has joined Amherst Pierpont as md, strategist, based in New York. She was previously svp, research analyst at Income Research + Management and before that worked at Deutsche Bank and Radian Asset Assurance.

BlueBay has appointed two new senior hires to its structured credit team amid a global structured credit strategy roll-out. Brian O’Hara joins the team as a portfolio manager, having previously spent 13 years as CMBS portfolio manager at KLS Diversified Asset Management. Before that, he held several other senior positions at firms including UBS Investment, Morgan Stanley and Fitch.

Mark Shohet joins BlueBay’s expanding US team as a senior analyst, having previously held the position of head of structured finance transactions at EY. Both O’Hara and Shohet will be based in the US and report to head of structured credit and CLO management, Sid Chhabra.

Remarketing results in SLM bond upgrade
Fitch has upgraded the SLM Student Loan Trust 2003-12 class A6 and B notes, following amendments to extend class maturity dates (to December 2068 from March 2038) and the successful remarketing and conversion of the class A6 from £277m to US$468m. The rating actions reflect the stable portfolio performance and increasing credit enhancement levels, which can sustain Fitch's triple-A and triple-B stresses respectively. The upgrade of the senior class is also supported by the elimination of counterparty risk introduced by the sterling/US dollar cross-currency swap.

RFC issued on credit assessment mappings
The EBA has launched a public consultation to amend the implementing regulation on the mapping of credit assessments of external credit assessment institutions (ECAIs) for securitisation. The changes reflect the relevant amendments introduced by the new securitisation framework, as well as the mappings for two ECAIs that extended their credit assessments to cover securitisations.

The implementing regulation - developed by the EBA and adopted by the European Commission on 11 October 2016 - aims to ensure that credit assessments issued by ECAIs can be used for calculating capital requirements for securitisation positions. As such, the EBA specifies the correspondence or ‘mapping' between credit ratings and the credit quality steps (CQS) defined in Chapter 5 of the CRR.

The CRR amendments brought by the new securitisation framework have made it necessary to update the mapping tables accordingly. Following the amendments to Chapter 5 of the CRR, a hierarchy of approaches was set out to calculate capital requirements for positions in a securitisation, whereby institutions using SEC-ERBA shall calculate risk-weighted exposure amounts based on CQSs set out in the CRR. The amended regulation reflects 18 CQSs for long-term external credit assessments, which ensures enhanced granularity and risk sensitivity with respect to the approaches previously considered in the regulation. 

In addition, since the adoption of the implementing regulation, one additional ECAI has been established in the EU with methodologies and processes in place for producing credit assessments for securitisation instruments, two existing ECAIs have extended their credit assessments to cover securitisations, and ESMA has withdrawn the registration of an ECAI. These changes have been reflected in the mapping tables accordingly.

Responses to the consultation paper should be submitted by 31 January 2022. A public hearing on the draft ITS will be held on 18 January 2022.

UK bridging loan business unveiled
Arrow Global has launched a new bridging loan business, Bergen Finance. The new London-based firm seeks to target the growing UK short-term real estate market - which has expanded since 2013 by over 400% to £5bn per year.

Leading Bergen Finance will be two new senior hires, Andrew Ward and Adrian Hogan, who will respectively serve as md and director. Ward joins having recently founded two independent lenders, and with over 25 years of experience in business and commercial lending at Lloyds, Five Arrows (Rothschild) and Credit Agricole. Hogan has over a decade of experience in secured lending – including establishing the Paddington Street bridge lending business.