Market updates and sector developments

Sabal Investment Holdings has closed a series of five B-piece investments, representing approximately US$2bn in collateral balance, across three Freddie Mac multifamily CMBS programmes. The programmes comprise SB-Deals, K-Deals and Q-Deals.

Three SB-Deals closed by Sabal are backed by Freddie Mac multifamily small balance loans (SBLs), totalling US$90m in bond balance across US$933m in collateral balance and 338 loans. Within the K-Deals programme, Sabal closed one B-piece investment within the KF series, which is backed by conventional, stabilised multifamily loans with floating rates and totals US$58m in bond balance across US$769m in collateral balance and 20 loans. The Q-Deals B-piece investment totalled US$55m in bond balance across US$304m in collateral balance and 11 loans.

Sabal has been active in this space since 2016 and is the second-largest purchaser of Freddie Mac small balance B-pieces, with nearly US$11bn notional acquired across 28 FRESB B-piece investments. The firm currently manages over US$1bn in assets.

In other news…

Dock Street bags another CDO
Dock Street Capital Management has been appointed successor investment adviser to the South Coast Funding IV transaction. Under the terms of the agreement, Dock Street accepts its appointment as replacement investment adviser and certifies that it satisfies the conditions of an eligible successor as set forth in the investment advisory agreement between the issuer and TCW Asset Management Company, as initial investment adviser. Moody’s has confirmed that the execution of the agreement will not impact its current ratings on the ABS CDO’s class B and C notes.

NPL templates adopted
The EBA’s implementing technical standards (ITS) in connection with NPL transaction data templates will become effective on 19 October, following their publication in the EU Official Journal. The final templates – which are to be used by credit institutions for the provision of information to credit purchasers when selling NPLs – include 129 data fields, of which 69 are mandatory.

Different data fields apply, depending on whether the NPL relates to a private individual or corporate borrower and the collateral type of the loan, according to NPL Markets. The templates are to be used for loans that were originated on or after 1 July 2018 and that became an NPL after 28 December 2021.

The ITS do not constitute a supervisory reporting obligation and there is currently no enforcement mechanism, but rather they rely on market discipline.