Sector developments and company hires

Fannie Mae has published a proposed methodology for single-family social disclosure, which aims to provide MBS investors with insights into socially-oriented lending while preserving the confidentiality of borrowers. At the core of the methodology are three key outcomes that the GSE is seeking to achieve with its Single-Family Social Index: prioritise borrowers; allow investors to identify pools with high concentrations of loans that meet social criteria; and propose an industry-wide solution.

Underpinning the proposal is the concept that social disclosures should facilitate the identification of MBS pools containing loans made to borrowers meeting certain social criteria, such that investors are empowered to support these lending activities. “While a correlation with loan performance is likely, the proposal contemplates that it is not essential for social disclosures to optimise performance insights. At the same time, we recognise that historical performance analysis is necessary to support investor decision-making,” Fannie Mae states.

The Social Index is contemplated as a scoring system comprising three dimensions, for which socially-minded investors have expressed interest: income, borrower and property characteristics. These dimensions are further defined using eight objective criteria that reflect Fannie Mae mission-focused activities, which would be evaluated for each loan pooled in a majority of the GSE’s single-family MBS. Any loan meeting one or more of the eight criteria would be deemed socially-oriented for the purpose of this disclosure.

The GSE hopes that other agency and non-agency RMBS issuers may desire to adopt the methodology – which, in turn, will help drive greater standardisation for social investment in RMBS and amplify the impact of these activities. Indeed, the Social Index could provide a roadmap for issuers to bring labelled Single-Family Social Bonds to market.

Fannie Mae is seeking to engage with investors and other MBS issuers to solicit feedback on the proposal over the coming months, prior to its implementation, and will work with the FHFA to address investor and issuer feedback ahead of and pending FHFA approval. The GSE envisions beginning implementation with MBS, but says that similar disclosures could be considered for CRT securities in the future.

In other news…

North America

CIFC has added two new senior hires to its legal and compliance team. Asha Richards has been promoted to general counsel, and Lily Wicker has joined the firm to serve as md, chief compliance officer, and associate general counsel. Richards has been with CIFC since 2015, most recently serving as deputy general counsel, and has more than 20 years of experience in asset management. Wicker joins the firm from Sound Point Capital Management, where she worked as chief compliance officer and associate general counsel, and in her new role will report to Richards. The firm hopes the pair in their new positions will contribute to its compliance work.

Deutsche Bank has recruited Philippe Kremer as director - structured credit and FIG (Insurance Solutions), based in New York. He was previously director - structured solutions global markets at Citi, having worked in ILS structuring at Swiss Re before that.

Marathon Asset Management has appointed Karen Lau as a senior portfolio manager within its corporate credit group. Lau joins the firm as md and alongside her new role will also serve as a member of the firm’s performing credit investment committee. She will report to cio, Louis Hanover, and will work primarily on the management of the firm's CLO portfolios. Lau joins the firm with extensive experience in portfolio management from Onex Credit where she served ad md and head of US CLOs. The firm hopes Lau’s expertise will help to build and scale its CLO platform and enhance investor relationships.