Sector developments and company hires

ACC servicing transferred post default
RAC Asset Holdings – the transferor and undivided trust interest beneficiary of the collateral underlying the ACC Trust 2019-2, ACC Trust 2021-1 and ACC Trust 2022-1 auto ABS (SCI 8 March) – has filed for Chapter 7 bankruptcy in the US Bankruptcy Court for the District of Delaware. The servicer for the securitisations, RAC Servicer, is also listed as a debtor in the bankruptcy filing.

However, servicing for the three affected deals was transferred to Westlake Portfolio Management (WPM) on 10 March, following a servicer default under each securitisation’s servicing agreement. WPM has accepted its appointment as successor servicer for a term of 30 days, which it may extend at its discretion.

WPM is now servicing all American Car Center (ACC) leases. KBRA notes that according to the February distribution reports, there were 23,805 securitised accounts with a value totaling approximately US$285m across the three outstanding ACC Trust transactions. The March payment date certificate was received by the back-up servicer, Computershare, but it remains unclear whether the RAC Asset Holdings bankruptcy will impact noteholder distributions on the 20 March payment date.

In other news…

EMEA
Banco Sabadell has named Ramon Llorente as assistant director-general and head of investment banking, based in Madrid. Llorente previously led the structured finance team at Banca March, which he joined in April 2018. Before that, he headed asset rotation and capital optimisation, structured finance at Santander.

FirstKey first to exercise ECR feature
FirstKey Homes 2021-SFR1 has become the first KBRA-rated single-family rental (SFR) transaction to exercise the excess collateral release (ECR) feature, which permits the borrower to obtain releases of properties without prepaying the loan or paying yield maintenance or additional release premium to the trust, subject to the satisfaction of certain conditions. Under the ECR, the issuer has requested the release of 729 properties from the collateral pool of 9,218 properties (equating to 7.9% of the pool by count and 7.5% by BPO value). Post release, the remaining 8,489 properties will collateralise the same debt of US$2.06bn.

KBRA analysed the post-release value and cashflow, which resulted in a KLTV of 83.4%, KDSC of 2.02x and a KDY of 3.8% for the remaining pool. The rating agency notes that these compare favourably to the issuance KLTV of 94.7%, KDSC of 1.93x and KDY of 3.6%.

The analysis indicated that the ECR, in and of itself, would not result in a downgrade or qualification of KBRA’s current certificate ratings. As such, the agency has issued a no downgrade confirmation to the servicer in connection with the ECR.

First STACR of 2023 prints
Freddie Mac has settled its first STACR transaction of the year, designated STACR 2023-DNA1, via joint bookrunners Bank of America and Nomura. It is highly unusual for the GSE to have waited this long into a new year before printing a CRT transaction and it stands in stark contrast to last year, in which record-breaking issuance was recorded.

The US$282m class M1A notes printed at SOFR plus 210bp, the US$99m class M1Bs at SOFR plus 310bp, the US$148m class M2s at SOFR plus 550bp and the US$82m class B1s at SOFR plus 850bp. Co-managers on the deal were Citi, Morgan Stanley, StoneX and Wells Fargo.

Italian CMBS hit by spending squeeze
Challenging macroeconomic conditions are having a negative impact on some Italian CMBS secured by retail properties, according to Fitch. The agency has taken negative actions on three of the four Italian retail CMBS it rates, reflecting weak consumer spending, subdued or negative real wage growth and rising interest rates.

Fitch highlights Pietro Nera Uno and Deco 2019 Vivaldi as securitisations that are exposed to Italian fashion outlets, which have been disproportionately hit by a fall in discretionary spending in the country. The agency downgraded at least part of the capital structures in both, after an increase in highly negotiated leasing arrangements with a greater incidence of turnover-only income.

Other CMBS that have been less impacted include Taurus 2018-IT and Emerald Italy 2019, neither of which have exposure to fashion outlets.

North America
New York-headquartered mortgage REIT manager Annaly Capital Management has appointed Warburg Pincus senior advisor Martin Laguerre to its board as an independent member. Laguerre will serve as a member of Annaly's audit and corporate responsibility committees.

He joined Warburg Pincus in February, after leaving his role as evp and global head of private equity at pension fund Caisse de Dépôt et Placement du Québec in November 2022. He was also recently appointed as an independent board member at brokerage and financial technology company BGC Partners.