Sector developments and company hires

Hybrid stop-loss deal closed
Swiss Re has closed its second hybrid bank financing and ILS transaction (SCI 22 April 2022). Building on the firm’s first innovative hybrid transaction from April last year, the latest multi-year stop-loss transaction provides Swiss Re with US$700m in underwriting protection for the financial years of 2023 to 2027, as it continues to pursue profitable growth.

Partnering again with JPMorgan and its institutional investor base, which financed the newly formed segregated account of the existing Matterhorn Re special purpose issuer vehicle, the transaction has been structured with the potential to increase up to a total of US$1bn. The transaction has been assigned stable ratings of Aaa/AAA/AAA by Moody’s, S&P and Fitch respectively.

In addition to enabling Swiss Re to grow its business in favourable market conditions, the deal is expected to have a positive benefit in terms of the firm’s regulatory and ratings capital requirements. The transaction is fully collateralised, with the proceeds to be held in notes issued by the EBRD.

In other news…

EMEA
Golub Capital is ramping up its European expansion with the recruitment of three private credit professionals to its London-based team. Daniel von Rothenburg, Philipp Schroeder and Mensah Lambie will strengthen the firm’s relationships with sponsors in the region.
Joining the business development and investor relations team, von Rothenburg will serve as md and head of EMEA, having previously operated as md at New End and Oaktree Capital. Schroeder and Lambie will both join the direct lending team as senior director and principal respectively, having served on the direct originations team and as principal at Apollo Global Management.

Norton Rose Fulbright has appointed a new partner to its capital markets team as it continues to grow its securitisation practice. Christian Lambie joins the firm in London and will work alongside securitisation partner, David Shearer.
Lambie brings extensive experience as a securitisation lawyer to the new role, with expertise in CMBS, RMBS and restructuring distressed transactions. In his previous roles as partner at Allen & Overy and most recently as legal counsel at Morgan Stanley, he served in an advisory capacity to several market-first transactions.

Westlake takes on ACC leases
Westlake Portfolio Management (WPM) has agreed to service leases originated by American Car Center (ACC), after ACC ceased operations on 24 February. However, not all leases have been transferred to WPM at this time and KBRA understands that ACC is exploring options to appoint a sub-servicer for the remaining ACC leases, which include those that collateralise the three outstanding ACC auto ABS. In addition, ACC has hired a number of prior employees as consultants with ACC servicing and information technology experience to collect payments, facilitate the servicing transfer and produce reporting required by the outstanding securitisations.

ACC has previously reported to KBRA that it had a managed portfolio of over 44,000 active customer accounts, with an aggregate lease principal balance of US$627.9m, as of 31 December 2022. Based on the February distribution reports, there were 23,805 securitised accounts with a value totaling approximately US$285m across the three outstanding ACC Trust securitisations.

KBRA last month placed six ratings on watch developing across three KBRA-rated ACC securitisations, which were in addition to two ratings already on watch downgrade owing to deteriorating performance.