Market updates and sector developments

Ares Alternative Credit has launched Ansley Park Capital, a newly-formed lending and specialty finance company that delivers full spectrum, customised financing solutions for essential-use, large-ticket equipment. Ansley Park’s management team and integrated operating platform were acquired from BciCapital, the equipment finance business of City National Bank of Florida.

Ansley Park will offer scaled, flexible equipment-based capital solutions ranging from US$5m to over US$100m to a diversified array of industries, including manufacturing, rail, construction, marine, infrastructure, energy, healthcare and corporate air travel. Ares Alternative Credit funds have committed approximately US$400m in initial equity capital to support originations, which the team expects to be in excess of US$3bn. In addition to direct financing originations, Ansley Park intends to partner with banks in executing capital markets transactions, acquire equipment finance portfolios, develop structured flow programmes and design equipment-focused balance sheet optimisation and capital relief solutions.

Ansley Park is led by seasoned industry executives, including Eric Miller, Mark Trollinger and Robert Seltzer. Members of the executive team have worked together for over 20 years and bring combined experience of over 150 years in commercial, risk, finance and operational executive roles.

Miller will serve as Ansley Park’s president and ceo, having most recently served as ceo at BciCapital. Trollinger will serve as Ansley Park’s cio and head of capital markets, having most recently served in the same role at BciCapital. Finally, Seltzer will serve as evp and head of direct originations, having previously served as the chief commercial officer for BciCapital.

In other news…

EOS, Veld ink consumer loan deal
Veld Capital and the EOS Group have acquired a portfolio of regulated French consumer loans from BNP Paribas Personal Finance via a securitisation vehicle funded jointly by Veld and EOS, with the servicing being migrated to EOS for management. The €364m (nominal value) portfolio is highly granular in nature, containing over 125,000 small balance French consumer loans with an average balance of under €3,000.

The portfolio has strong, stable cashflow from amortising loans with affordable monthly payments and a weighted average seasoning of over two years. As a result of these characteristics, the underlying assets demonstrate high payment predictability and stability.

With this transaction, Veld and EOS have further strengthened their operating partnership, having previously co-invested together in a number of European jurisdictions and asset types. EOS France, a subsidiary of the international EOS Group, has more than 30 years of experience in the purchase and servicing of receivables portfolios within the French market.

Leveraging extensive relationships and product expertise developed as a solutions provider to European banks over its 14-year history, Veld primarily targets granular, amortising and asset-backed investment opportunities, benefiting from data-rich underwriting where it can utilise internal expertise as well as comparable proprietary data.

M&B bucks WBS decline
Debt ranking and a combination of industry and company risk profiles are the key differentiating factors between rated UK whole business securitisations, Fitch says in a new report. The report compares the agency’s UK WBS peer group in terms of qualitative key rating drivers, financial metrics and rating positioning.

The Fitch report shows that industry profile is driven by operating environment and barriers to entry, while the company profile is mainly determined by financial performance and asset quality. Protective debt structural features - including fully amortising debt structures, comprehensive security packages, cash lock-up provisions and dedicated issuer-level liquidity facilities - support the rating level.

The majority of UK WBS transactions are in the pub and leisure sectors, but tower business or funeral homes and crematoria also feature. The pub and leisure sectors are exposed to demand risk and discretionary spending, with other WBS sectors less exposed to these factors.

Fitch notes that company risk profiles have evolved, leading to several downgrades in the past decade, particularly in sectors exposed to discretionary spending. However, pubs with managed operating models are viewed as more adaptive and transparent than leased/tenanted pubs, due to their full control over operations.

The agency cites M&B - the only pub company in its portfolio with a ‘stronger’ company profile assessment, reflecting the fact that it is a large operator of restaurants, pubs and bars in the UK – as an example. Almost all of M&B’s securitised estate is managed pubs and the company has a long record of maintenance capex in excess of the covenanted level.

The company’s trading history (2006-2019 CAGR per pub of 2.9%) has been resilient to declining UK pub industry fundamentals. Although revenue growth was severely affected by the pandemic, management acted swiftly to control costs and enhance liquidity, raising £350.5m equity at the group level.

Corinne Smith