Sector developments and company hires

EU authorities call for improved climate data
ESMA, in collaboration with the EBA, EIOPA and the ECB, has disclosed that it is working towards enhancing disclosure standards for securitised assets by including new, proportionate and targeted climate change-related information. At the same time, the ESAs and the ECB are also calling on issuers, sponsors and originators of such assets at the EU level to proactively collect high-quality and comprehensive information on climate-related risks during the origination process.

Securitisations are often backed by assets that could be directly exposed to physical or transition climate-related risks, such as mortgages and auto loans. Since the value of these underlying assets could be affected by climate-related events, the ESAs and the ECB believe that the reporting on existing climate-related metrics needs to improve and that additional metrics are necessary.

The lack of climate-related data on the assets underlying structured finance products not only poses a problem for properly assessing and addressing climate-related risks, but also impedes the classification of products and services as sustainable under the EU Taxonomy Regulation and SFDR, according to the authorities. The ESAs and the ECB are currently reviewing the SFDR Delegated Regulation to enhance ESG disclosures by financial market participants, including to require additional disclosures on decarbonisation targets.

In this context, the ECB says it is committed to acting as a catalyst, engaging closely with the relevant EU authorities to support better and harmonised disclosure of climate-related data for assets mobilised as collateral. Additionally, ESMA is reviewing loan-level securitisation disclosure templates, with the aim of simplifying reporting where possible and considering the opportunity of introducing new, proportionate and targeted climate change-related metrics that will be useful for investors and supervisors.

Easy and seamless access to climate-related data should also be available through registered securitisation repositories to further enhance transparency and clarity for investors. This would avoid fragmented information across different access points and would result in lower costs and risks for originators, investors and supervisors, according to the ESAs.

In other news…

‘Challenging’ outlook for pub WBS
The UK pub whole business securitisation (WBS) market is struggling to return to pre-pandemic levels of profitability, according to Fitch. The agency cites persistently high inflation as the key driver behind pubs' struggles. This has had a direct impact on margins, due to elevated costs and a wider macro impact on consumer confidence and disposable income.

Fitch data reveals that managed estate EBITDA figures at Greene King, Marston's and Mitchell & Butlers each remained below 82% of 2019 levels in the 12 months to July 2022. Green King's earnings were the lowest of the three, at 71.9% of 2019 EBITDA.

In comparison, annual revenue at each group recovered to more than 92% of 2019 levels, with Mitchell & Butlers reaching 97.1%.

Fitch says inflationary pressures may have peaked and that many pubs have taken cost-saving measures to soften the impact of rising costs. However, it anticipates trading conditions will remain challenging for the sector in the short term.

The agency has assigned negative outlooks to all junior tranches of its rated pub WBS issues.

EMEA
Hayfin Capital Management has appointed Golding Capital Partners' Marco Sedlmayr as md and head of DACH in its partner solutions team, based in Munich. Sedlmayr leaves his role as md at Golding and head of institutional clients in Germany and Austria, after four and a half years with the firm.

Prior to joining Golding, he spent four years working with insurance and corporate pension clients at Allianz Global Investors. Sedlmayr has also had spells at Crédit Agricole Group, JPMorgan and KPMG Deutschland.