Sector developments and company hires

NPL data templates introduced
The EBA has launched NPL transaction data templates, aimed at introducing information standardisation to increase the efficiency of secondary markets for non-performing loans and to reduce entry barriers for smaller banks and investors. The proposed NPL transaction data templates are built on previous voluntary loan-by-loan templates and consider the experience of market participants from the sell- and buy-side and other stakeholders.

The EBA’s final draft implementing technical standards (ITS) specify the required information that credit institutions selling NPLs shall provide to prospective buyers. The objective of the draft ITS is to provide a common data standard for NPL sales or transfers across the EU, enabling cross-country comparison and thus reducing information asymmetries between the sellers and buyers of NPLs.

The templates cover information regarding counterparties related to the loan, contractual characteristics of the loan itself, any collateral and guarantee provided, any legal procedures and enforcement procedures in place, and the historical collection of loan repayment. They are also complemented by a data glossary and the instructions for filling in the templates.

The EBA says the draft ITS are based on strong proportionality arrangements, focusing on the sales of NPL portfolios and setting different information requirements - depending on the nature of the borrowers and of the loans included in the portfolios to be sold - by specifying mandatory data fields. Proportionality is further reinforced by allowing all data fields to be treated as not mandatory for certain types of transactions.

The draft ITS have been submitted to the European Commission for adoption.

In other news…

EMEA
Dentons has recruited Niamh Keogh to its Dublin office, with experience in advising on inward investment into Ireland and a specialist on the use of Irish regulated fund structures and securitisation vehicles. She joins the firm from Mason Hayes & Curran, where she is a partner and co-head of tax.

Elliot Milton, a former svp at SMBC Aviation Capital, has joined Walkers' asset finance team in Dublin as Of Counsel. He previously worked in private practice in Dublin, London and Brussels for several years, before working as a diplomat in the Irish foreign service, including at its Embassy in Tokyo.

Spanish relief to have ‘limited’ RMBS impact
The Spanish government late last month approved a range of relief measures to support Spanish households, including a new code of good practices for those considered to be at risk of becoming vulnerable. DBRS Morningstar expects the proposed measures – which feature mortgage forbearance – to have a limited impact on the asset performance of RMBS portfolios, however.

According to the rating agency, around 11% of the current balance of household mortgages across the Spanish RMBS universe could meet the required conditions to apply for the relief measures included in the new code of good practices. However, it believes that the perimeter of eligible households may be lower than 11%, as the RMBS universe sample has different characteristics than the domestic stock of mortgages on Spanish banks’ balance sheets.

Nevertheless, DBRS Morningstar notes that while providing access to temporary payment holidays and maturity extensions to low-income borrowers in distress may reduce RMBS collections in the short term, such flexibility should also help to reduce delinquency levels and prevent defaults.