Sector developments and company hires

Enpal backed for Germany’s first solar ABS 
Renewable energy company Enpal has secured €356m from Citi and M&G to fund a warehouse facility for Germany’s first residential solar securitisation. The deal will provide Enpal customers access to financing for around 12,500 photovoltaic systems spanning energy storage and electric vehicle charging.

Citi has made a senior debt commitment of €300m to the facility, while M&G has made a mezzanine debt commitment of €56m. The transaction is the first European investment by Citi and M&G in the residential solar assets space.

In other news…

MILN tender offers on the cards
Essent is seeking noteholder consent to undertake cash tender offers to repurchase the mortgage insurance-linked notes issued by Radnor Re 2019-1 and Radnor Re 2020-1, respectively due 25 February 2029 and 25 January 2030. The consent of 100% of noteholders is required by 18 April, although consenting will not obligate holders to tender their notes in any cash offer.

If 100% consent is received, RMIR 2019-1 and RMIR 2020-1 will each enter into a supplemental indenture and amendment to the reinsurance agreement with respect to the notes to commence the cash tender offers. The supplemental indenture and amendments may be executed at any time prior to 28 April.

As an incentive, the issuer will pay noteholders that deliver valid consents prior to 18 April a cash payment equal to US$1 per US$1,000 outstanding principal amount of notes. For purposes of the consent fee, the principal amount used for the calculation will be the outstanding principal amount of notes, less the principal portion of any impairment amounts. The consent fee will only be paid if all the conditions of the applicable consent solicitation are satisfied, including the receipt of consent from the holders of 100% of the outstanding principal amount of the applicable notes.

SEC re-proposal ‘critically flawed’
The SFA has submitted a comment letter to the US SEC regarding the recently re-proposed rule on the prohibition of conflicts of interest in securitisations (SCI 26 January). Given that the SEC did not grant a deadline extension, as requested by SFA and 11 other trade associations, the SFA’s letter acknowledges that more work remains to be done to assess the impact of the proposal.

Overall, the letter highlights that the sweeping approach taken in the re-proposed rule would significantly impede and restrict vital activities – including risk-mitigating hedging, financing and investing – across a wide swath of the investor, bank, broker-dealer, corporate issuer and servicer communities. It also details how the re-proposal is critically flawed, conflicts with the goals of numerous prudential regulators, relies too heavily on the Volcker Rule as a precedent and would leave a broad universe of market participants not knowing whether it is covered by the rule - and if so, whether its conduct could be deemed to have violated the rule.

Additionally, the letter suggests that the rule could perversely discourage ABS investors from negotiating the terms and collateral of ABS because those actions could be interpreted as “substantial involvement” in the design, structure or assembly of the ABS that would then trigger the need to implement a complex, expansive and ambiguous compliance regime. Given the limited deadline and broad remit of the re-proposed rule, the SFA says it plans to submit a second supplemental letter after the technical deadline to further detail its market-wide consensus recommendations.