Sector developments and company hires

The German Federal Ministry for Education and Research has awarded a grant to the Leibniz Institute for Financial Research SAFE and the European Datawarehouse (EDW). The grant has been awarded under the ministry’s Climate Protection and Finance (KlimFi) funding initiative to undertake a three-year project to promote the green auto ABS market. The project, named ‘Green Auto Securitisation’ (GAS), will work to create meaningful incentives for the automotive industry - as well as stakeholders and end users - to establish a framework for a green finance mechanism that supports the financing of low-emission vehicles (LEVs) through bank lending. The GAS project will specifically work to contribute to the KlimFi’s funding initiatives’ objectives by proposing a framework for new and climate-friendly products, as well as making improvements on quality. The database would enable the reporting of ESG-related information at a single exposure level, and the enrichment of loan and lease-level data with manufacturers’ ESG ratings and details on car emissions and characteristics. EDW will develop the ESG database as a tool useful for the study of the nascent market for green auto loans/leases, as well as for the development of corresponding credit risk models – and therefore facilitating the researchers of Loriana Pelizzon’s team at SAFE to compile reliable research results.

In other news….

EMEA

AnaCap Financial Partners has finished the carve-out of its credit business. The leadership of the specialist mid-market private equity investor in financials, technology, and related business services' credit business will establish a new investment advisory business – Veld Capital. Veld will advise the existing credit funds and raise additional funds to be led by the same dedicated team and will continue to utilise the firm’s existing investment approach and broad networks across Europe. Since its initiation in 2009, AnaCap’s credit business has deployed over €2bn into credit-oriented opportunities, beginning by targeting non-core assets from financial institutions across Europe. Financial details of the transaction have not been disclosed, but AnaCap’s European private equity business will remain at the centre of the franchise.

North America

Apollo Funds is set to acquire a minority stake in the alternative asset manager focused on global credit markets, Diameter. The acquisition of a 5% equity interest in Diameter by funds managed by Apollo – including its affiliate Redding Ridge – will help support the development of the New York-based alternative asset manager’s alternative credit platform into direct lending and European credit. The minority investment also builds upon the existing strategic relationship between the firms, following on from capital commitments that helped launch Diameter’s US CLO business last year. Apollo’s investment brings its to-date funds deployed by funds affiliated with Apollo and Redding Ridge to more than US$1bn of debt equity capital across Diameter’s CLO and CBO investment strategies.

Freddie Mac has priced STACR 2022-DNA7 via joint bookrunners Nomura and Credit Suisse. The co-managers were BTIG, Citigroup, JP Morgan and StoneX. The notes settled on 30 September 2022. This trade consisted of a $237m M-1A, yielding SOFR plus 250bp, a $180m M-1B yielding SOFR plus 500bp and a $100m M-1 yielding SOFR plus 700bp.

Moody’s Investors Service (MIS) has published a new assessment framework for offering Second Party Opinions (SPOs) on sustainable debt. The new framework succeeds the transfer of Moody’s SPO business from its ESG Solutions Group to MIS. The new framework establishes how MIS provides SPOs on green-, social-, and sustainability-labelled financial instruments or financing frameworks following a use-of-proceeds or sustainability-linked approach. The MIS SPO assessment framework will score on the alignment with green, social, and sustainability practices, produce a score marking contribution to sustainability across environmental, social, and governance externalities, as well as offering an overall sustainability score. MIS SPOs and their underlying scores are reflective of point-in-time analyses which can be updated upon request by the issuer and are intended to operate as an additional tool for market participants to use in conducting their own analysis.