Sector developments and company hires

Irish, UK NPE disposals inked

The Bank of Ireland has reached agreements to dispose of portfolios of Irish and UK non-performing exposures, through two separate transactions. On completion, the transactions will result in a pro-forma reduction in the Group’s 30 June 2022 NPE ratio from 5.4% to circa 3.7% and a modest positive impact (of around 5bp) on its CET1 ratio. The gross interest income on the portfolios was about €30m on an annualised basis.

In respect of the UK NPE portfolio, Bank of Ireland will dispose of - by way of securitisation - a portfolio of non-performing UK mortgages with a gross carrying value of circa €600m, secured by owner-occupied and buy-to-let investment properties. The transaction is expected to complete on 15 November, subject to customary closing conditions.

The mortgages and related customer relationships that form part of the securitisation will continue to be serviced by the Group, but the assets will be derecognised from its balance sheet.

The second disposal agreement concerns an Irish non-performing loan portfolio with a gross carrying value of circa €800m, comprising primarily of private dwelling house (PDH) and BTL NPEs, together with a smaller portfolio of non-mortgage NPEs, in a transaction financed by funds managed by AB CarVal. The transaction is expected to complete later in 2022, subject to customary closing conditions.

The group will be appointed as interim servicer for a period prior to legal title transfer and credit servicing migration. Post migration, Mars Capital Finance Ireland will manage the loans as legal title holder.

In other news…

Costs cut via Q-Series CMBS

Serial CRE CLO issuer ACRE has finalised a US$424m CMBS backed by 11 multifamily mortgage loans, its first through Freddie Mac’s Q-Series securitisation programme. Issued via the ACRE Credit I debt fund, the floating rate bridge loans are secured by 11 transitional multifamily properties located across Georgia, Texas, Colorado, North Carolina and Arizona.

ACRE notes that given CRE CLO pricing has widened significantly this year, the Q programme represents significant economic advantages for issuers. The guaranteed tranche of ACRE’s deal – dubbed Q18 - sold at 87bp over SOFR, compared to around 275bp over SOFR for triple-A CRE CLO tranches currently. In fact, with Freddie Mac’s guarantee fee of circa 98bp on the class A bond, the WACC on a Q deal is about half the cost of a CRE CLO.

The securitisation was led by JPMorgan and Barclays, with JLL Capital Markets serving as advisors and sub-servicers for the deal.

EMEA

CIFC Asset Management has appointed Conor Daly md and head of European credit, based in London. He was previously md, head of European credit at Onex Credit and worked at BlackRock and Morgan Stanley before that.

Alessandro Maurelli has re-joined Nomura as an executive director in its real estate and structured finance team, based in London. He was previously a vp in GIC’s real estate team, which he joined in September 2019. Prior to that, Maurelli was a vp – ABS solutions at Nomura.

North America

Greystone has entered into a joint venture with the floating rate capital solutions provider for commercial real estate owners, Inlet Real Estate Capital. The joint venture, Greystone Inlet Real Estate Capital, will target complex or potentially distressed situations. It will work to provide debt and equity recapitalisation solutions for multifamily, industrial, office, mixed use and other property types in need of further time and capital to properly execute the business plan and stabilise the property. The partnership between Inlet Real Estate Capital and the Greystone affiliate, Greystone Commercial Mortgage Capital, will also offer flexible structured capital solutions – including first mortgages, mezzanine loans, preferred equity investment and multiple structure hybrids. Down the line, Greystone Inlet Real Estate Capital hopes to provide sponsors with direct access to long-term, fixed rate financing through Greystone’s CMBS and agency financing platforms. It will focus on US-located transactions between US$5m and US$50m.

Ontario Teachers’ Pension Plan has promoted Ted Xiao Guo to md, head of structured and thematic credit, based in Toronto. He was previously portfolio manager and md, credit.

SMBC Nikko Securities America has recruited Raffi Dawson to lead its structured finance group. Dawson, who joins the firm as md and head of the structured finance group, will be based in New York and report to head of capital markets and investment banking, Scott Ashby. In the new role, Raffi will oversee the firm’s securitisation business, including conduits, ABS and CLOs. He brings extensive experience across multiple sectors for securitisation - including telecom, media and technology, fintech, energy, sponsors and IDI – while serving previously as md and co-head of origination in securitised products origination for Mizuho. SMBC hopes Raffi’s addition to the team will help support the growth of the securitisation business, leading the ever-expanding team to strengthen strategy execution and offerings to global corporate clients.