Sector developments and company hires

Italian mid-cap deal debuts
illimity Bank has closed what is believed to be the first securitisation backed by a portfolio of 82 unsecured loans granted to Italian mid-caps and corporates that are predominantly guaranteed by the country’s export credit agency SACE. Dubbed Colt SPV, the €570.11m transaction was originated based on the ‘Liquidity decree’, enacted in June 2020 to help kickstart the Italian economy.

The majority (76.2%) of the portfolio is guaranteed by SACE, with the remainder guaranteed by the Central Guarantee Fund for SMEs, managed by Banca del Mezzogiorno (MCC). Most of the loans benefit from a pre-amortisation period.

The average loan ticket within the pool is €6.5m and the maximum loan ticket is €25m. Debtors active in the cyclical construction and building sector represent only 19% of the total portfolio, while the top region – Lombardy - accounts for 41%.

However, Moody’s notes that the transaction has several challenging features, including the lack of granularity - with 69 debtors, the top 1 and 10 represent 5.3% and 41.1% of the pool respectively. Further, the borrowers' average credit quality is relatively low in the low single-B range.

The servicer (illimity Bank) can also renegotiate several terms and conditions of the loans up to certain limits. These renegotiations could affect loan maturity and the interest rate applied to the loans.

Rated by DBRS and Moody's, the transaction comprises €375m A/A1 rated class A notes, €79.1m B(h)/B2 class B notes and €116.01m unrated class J notes.

Lanterna Finance from June 2021 was the first ABS to benefit from the ‘Liquidity decree’, but it is backed by a granular portfolio of small ticket unsecured loans fully guaranteed by the Central Guarantee Fund for SMEs (SCI 30 June 2021).

In other news…

ABS CDO transferred
Dock Street Capital Management has replaced Barings as successor collateral manager for the Monroe Harbor CDO 2005-1 transaction. Moody’s has confirmed that the move won’t impact the ratings assigned to the notes.

Global
Cadwalader has elected nine attorneys to the firm’s partnership and promoted eight attorneys to special counsel and counsel, effective 1 January 2023, including five from the firm’s capital markets practice with experience in structured finance.

Among those promoted to partner is Alexander Collins, based in Cadwalader’s London office, who focuses particularly on CLOs. Michael Ruder – who is based in Charlotte and focuses on CMBS - has also been named a partner.

Among those promoted to special counsel are: Elena Bernal, who is based in London and focuses on CLOs and private asset-backed facilities; and Cassidy Nolan, who is based in Charlotte and focuses on CLOs and other ABS. Finally, Hunter White – who is based in Washington, DC and focuses on structured finance transactions – has been named counsel.