Securitization
Top Securitization Stories
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Cembra feeds starving Swiss with rare auto lease trade
Cembra Money Bank is set to print the first Swiss ABS to hit the market since the Swiss National Bank abandoned its franc-euro peg, having increased the revolving period for its third securitization of auto lease receivables.
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Macquarie goes double dollar for first auto deal of 2015
Macquarie Leasing will be chasing US demand for its first SMART auto transaction of the year, which will be denominated primarily in dollars.
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Fannie Mae opts for CAS over private deals
Banks want to work with Fannie Mae to bring more private risk-sharing transactions, but Fannie has opted instead to bring deals off its own platform.
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Altisource grabs more rental properties
US investor-landlord Altisource Residential announced on Monday that it acquired and rented an increased number of real-estate owned properties last quarter.
Latest News
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Paragon pushes back into Scottish mortgages
UK buy-to-let RMBS issuer Paragon has restarted lending to landlords in Scotland’s private rental sector for the first time since the financial crisis, saying the market has doubled in 12 years.
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NewDay leads strong pipeline of European ABS
Bankers’ predictions of a deep and varied pipeline of European ABS to be priced in March are starting to come good, with NewDay Cards’ second securitization at the head of the queue this month.
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Fifth Street preps second middle market CLO
US middle market lender Fifth Street Asset Management, which priced its first ever CLO in February, is ramping its second, which should price in the second quarter.
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European ABS outperforms ‘most others’ but risks evolve
Strong underwriting has helped European securitizations outperform most structured finance products, but new risks are emerging as markets evolve and the economic outlook improves, says Fitch.
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Race to the bottom: docs suffer amid CLO demand surge
From Tokyo to Toronto to Tel Aviv, new buyers across the globe are piling into the senior tranches of US CLOs — and more experienced triple-A investors aren’t happy about it.
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Cerberus & Five Ten: the first multi-borrower rental deal?
Two new suppliers of single family rental ABS could be coming to market if Cerberus Capital Management acquires Five Ten Capital.
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Flagship subprime auto ABS to benefit from merger
Flagship Credit Acceptance, which merged with another US subprime ABS issuer, CarFinance, earlier this year, is marketing its first subprime auto ABS of 2015.
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RBS sheds 34% of securitization exposure
The dismantling of Royal Bank of Scotland’s global investment bank has had a heavy impact on its securitization activity, with its long positions in the sector falling 34% last year.
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Resimac joins rush of RMBS as Suncorp tops A$1bn
Suncorp Bank increased the size of its Apollo 2015-1 RMBS to A$1.25bn by pricing, and there is plenty more Australian RMBS on the way with Resimac adding its itself to the pipeline on Thursday.
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Barclays gets its big CLO break with new US mandate
Barclays has bagged a mandate for one of New York’s largest CLO managers, its first deal for a top-tier stateside CLO issuer since entering the market in 2012.
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Investors primed for new SFR ABS structure
American Homes 4 Rent’s first single-family rental securitization of the year was priced at 140bp over swaps on Thursday.
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Precise mid-tier flies as investors jump on non-con RMBS
Renewed appetite for UK non-conforming RMBS has driven Precise 2015-1 to multiple subscription levels, though guidance on the top stack of notes has been set at the wide end of initial price thoughts.
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VW to print auto ABS in third currency this year
Volkswagen Financial Services has set out to add Australian dollars to its growing list of currencies for auto ABS prints already this year, after issuing guidance on its second securitization of Australian auto loan receivables.
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Delinquencies up but auto ABS still full throttle
Despite rising delinquencies the US auto ABS pipeline continues unabated, and analysts are not significantly revising their performance expectations.
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AH4R launches rental ABS with new structure
American Homes 4 Rent is drawing on a CMBS tactic in a first of its kind single-family rental (SFR) securitization which addresses refinance risk.
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New-look Apollo RMBS covered in line with Puma
Investors have shown their liking for newly introduced features in the structure of Suncorp Bank’s latest Apollo RMBS, with all five tranches covered by orders on Tuesday.
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RMBS demand solid but Italian house prices heading lower
Italian RMBS may be on investors’ wish lists but the country’s housing market is still struggling to show similar strength, with Fitch predicting low demand will depress prices further this year.
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S&P ratings error puts RMBS on negative watch
Standard & Poor’s announced late on Friday that it placed the ratings for 338 classes of legacy RMBS on credit watch negative due to an analytical error.
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HLSS escapes Ocwen handcuffs
Home Loan Servicing Solutions has found a potential escape from its dependence on loans serviced by Ocwen Financial, but RMBS and ABS investors might not be so lucky.
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US investors demand more from Santander with sterling funding favoured
Santander Consumer UK showed a clear bias towards cheaper sterling funding in pricing its dual tranche auto ABS last week, but GlobalCapital understands US investors are pushing the issuer for more dollar paper.
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Ocwen and Nationstar keep quiet on MSR pricing
Ocwen Financial announced an agreement to sell a $9.8bn portfolio of mortgage servicing rights to Nationstar Mortgage on Monday, but a lack of detail means the impact of the deal is unclear.
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Timely pick-up in Spanish mortgage performance
Moody’s has revealed an improved performance in mortgage pools backing Spanish RMBS transactions in the fourth quarter, just as Spanish securitizations are predicted to resume.
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CBA doubles up on Medallion return
Commonwealth Bank of Australia doubled the size of its latest RMBS placing before pricing on Friday, though the A$2bn deal still fell well short of its last effort.
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Coming soon: a new structure for non-agency RMBS
RMBS issuers are considering a new type of deal structure which appoints a transaction manager with a fiduciary obligation to investors, GlobalCapital understands.
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S&P error could mean "between 300 and 400" RMBS downgrades
Standard & Poor’s left markets guessing about its legacy RMBS ratings following its announcement Thursday night that a departure from its methodology could result in widespread downgrades.
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Investors revel in ECB’s impact on ABS market
Despite investor anger over the European Central Bank’s entry into the European ABS market as a buyer in November, and widespread disappointment over its pace of intervention, they are now enjoying what some claim are the best opportunities in years.
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Subprime auto deals 'snapped right up'
Investors were quick to purchase small subprime auto ABS issues by DriveTime and CarFinance that were priced on Wednesday.
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Navient and Nelnet chase hungry student loan buyers
Low issuance of securitizations of federally guaranteed student loans has left investors hungry, an appetite that could be sated by private student loan providers such as Sofi.
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EU takes aim at retention and ratings for ‘high quality’ ABS
The European ABS industry is inching closer to the new comprehensive approach to regulation it has been craving since the financial crisis, after the European Commission on Wednesday launched a consultation on securitization that appears heavily informed by market participants’ long held concerns.
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Commission publishes Capital Markets Union plan
The European Commission has published its Green Paper on Capital Markets Union, alongside consultations on securitization and prospectus regulations.
People News
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BAML reshuffles NY structured credit with new co-heads
Bank of America Merrill Lynch has appointed two new co-heads for its global structured products and credit financing team in New York, which includes its CLO business.
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BAML raids JPM for ABS syndicate
Bank of America Merrill Lynch has hired a dedicated head of ABS syndicate for EMEA, ending the bank's post-crisis arrangement of syndicating ABS issues through its trading desk.
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CS takes BAML head ABS trader in NY
Credit Suisse has hired Bank of America Merrill Lynch’s head of ABS trading in New York, having recently reaffirmed its commitment to the business.
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George Ellison tapped as Altisource CEO
Former RMBS fraud defendant George Ellison is replacing Ashish Pandey as CEO of Ocwen Financial affiliate Altisource Asset Management Corporation (AAMC), according to an announcement.
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Ex-Lloyds boss joins P2P pioneer
Eric Daniels, the former chief executive of Lloyds, has joined Wellesley Finance as non-executive chairman.
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Goldman's Millette not retiring, said to eye insurance investing role
Michael Millette, head of structured finance at Goldman Sachs, is leaving the investment bank at the end of February. However, the 49 year old industry veteran is not officially retiring from the structured finance industry, according to an individual familiar with his departure.
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Cantor snags two MBS trading heads from BAML
Cantor Fitzgerald has hired two MBS trading heads from Bank of America Merrill Lynch, the firm announced on Thursday. The new hires, Brendan Donnelly and Mohil Gupta, join Cantor as managing directors in MBS sales and trading.
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Sandler O'Neil grabs two for CMBS trading platform
Sandler O’Neil & Partners have hired CMBS traders David Cook and Andrew Flick from Brean Capital. The pair will focus on building a CMBS franchise at Sandler O’Neil, the investment bank said in a release on Monday.
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William Shuey to head securitization at Opus CMC
William Shuey has joined Opus Capital Markets Consultants as the due diligence provider’s director of securitization. He will oversee securitization processes with a focus on RMBS compliance, Opus announced on Monday.
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RMBS and ABS head takes over CLOs after Deutsche trading exodus
Deutsche Bank’s head of non-agency RMBS and consumer ABS trading has taken over CLO trading after the departure of Richard Rizzo last week. People familiar with the situation at the bank, which just priced its first US CLO of the year, say it is still fully committed to the business, but some investors are sceptical.
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SocGen takes 11 from RBS for new CMBS platform
Société Générale is taking advantage of Royal Bank of Scotland’s retreat from US securitization to launch a new CMBS platform, its first in the US since the financial crisis.
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Lloyds continues US push with another London transfer
UK-headquartered Lloyds Bank has transferred yet another senior banker to its New York outpost, as it attempts to win market share in carefully-selected parts of the US capital markets such as corporate debt and securitization. The new addition will focus on North American institutional investor coverage for the bank’s financial institutions team.
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Cadwalader names securitization expert as managing partner
Law firm Cadwalader, Wickersham & Taft has named Patrick Quinn, an expert on the securitization market, as managing partner.
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Bay area PM approaching new ABS fund launch
A San Francisco Bay area portfolio manager is readying his firm’s first dedicated securitized asset fund, focusing on esoteric ABS, as well as RMBS and CMBS and some CLOs.
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CLO moves: Gulf Stream CLO manager leaves Apollo
A portfolio manager mainly focused on CLOs acquired from Gulf Stream in 2011 has left Apollo Global Management, GlobalCapital understands. Separately, Apollo is marketing its first US CLO of 2015, ALM 12, with Morgan Stanley as arranger.
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US Ex-Im Bank hires OPIC structured head
The Export-Import Bank of the United States has hired the Overseas Private Investment Corporation’s former vice president of structured finance to oversee its structured finance transactions, according to a statement from the Ex-Im Bank.
Top ABS Stories
Top CLO Stories
Top RMBS Stories
Comments? Questions? Tips?
Will Caiger-SmithSecuritization Editor
+44 (0)207 779 7323
will.caiger-smith@globalcapital.com
Ryan Bolger
New York Reporter
+1 212 224-3243
ryan.bolger@globalcapital.com
Tom Porter
European Securitization Editor
+44 (0)207 779 7324
tom.porter@globalcapital.com
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Mark Goodes+44 (0)207 779 8605
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George Williams
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Opinion
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Fix securitization before printing SME backed bonds
European authorities want banks to provide credit to small and medium sized enterprises through SME backed covered bonds. But they don’t need the funding; they need capital. They need securitization.
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Two crucial ways P2P lenders aren’t like banks
Financial innovation deserves scepticism, especially unregulated investments offering retail investors supposed juicy returns. But while P2P lending merits scrutiny, it is both less useful, and less dangerous, than banking.
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Peer-to-peer lenders are just banks — without the capital and regulation
Don’t be distracted by the razzmatazz. Peer-to-peer lenders walk like banks and quack like them. As a retail bond offering from Wellesley & Co in the UK makes clear, bankishness is one of the best things about P2P. But don’t go thinking the risks are the same.
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‘High quality’ just a smokescreen for investors
There was muted celebration in the European ABS market this week as yet another rule making body began to row back from the punitive regulatory treatment imposed on the industry in the wake of the financial crisis.
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What happens in ABS shouldn’t stay in ABS
The omerta code works fine for a weekend in Sin City, but not for one of the US’s most important funding products. The securitization market must adapt to the spirit, not just the letter, of new transparency requirements — it is quickly running out of excuses not to do so.
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FHFA vs FHA: Here we go again…
The US’s Federal Housing Finance Agency and the Federal Housing Administration are locked in yet another round of fisticuffs, with market share as the prize. If the private label RMBS market is to return, the government needs to stop hitting itself.
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Capital rules for securitizations: Basel giveth and Basel taketh away
Mention “Basel capital charges” to someone in the securitization business and prepare for a shudder — the industry has had to swallow new rules every year for three years, and costs could still cripple the market. But help could be at hand from another set of Basel rules.
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Securitization shouldn’t over-promise on real economy benefits
Securitization has come a long way in the past two years, not least in the minds of regulators. But the industry needs to start managing expectations. It is not going to solve Europe's problems on its own.
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The ABS purchase programme could be over before it’s even begun
Since making its decision to purchase asset backed securities, the policy message from the European Central Bank has floated somewhere between credit easing and quantitative easing. One won’t work, and the other should have nothing to do with ABS.
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Time for banks to wise up to P2P
The term 'sharing economy' might elicit groans from many corners of the banking industry, which have thrived for years on sharing as little as possible.
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This was never about ABS — the ECB is rudderless
The European Central Bank put a lot of effort into telling everyone securitization’s direct link to the real economy was the reason it deserved to be the principal target of asset purchases. Now that illusion has been shattered by reports it is considering corporate bond purchases, the ECB should just get on with the broad-based cash injection it clearly intends.
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A perfect storm brews in CLOs
The eternal tussle between equity and triple-A investors in collateralised loan obligations intensified this week, as a widening in triple-A CLO spreads drove down equity returns even further and forced some arrangers and managers to make concessions in order to lock senior debt investors into their deals.
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All aboard for QE2
The longer the European Central Bank waits to talk about sovereign quantitative easing, the closer sovereign QE seems to become.
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Don't be afraid of accountability: Make bank complaints public
The Consumer Financial Protection Bureau wants to make written complaints public on its online consumer complaints database. Unsurprisingly, the Mortgage Bankers Association objects. But when online customer reviews have empowered consumers in other sectors, why should the banking industry get special treatment?
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TLTRO won’t help credit
The Targeted Long Term Refinancing Operation conducted on Thursday by the European Central Bank is not targeted and will do little to improve the expansion of European credit.
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The ECB must buy mezz
The European Central Bank has finally put its money where its mouth has been for some time on reviving European securitization. But if it doesn’t help banks shift the riskiest tranches off their books, it will have changed absolutely nothing.
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No more size anxiety about the ECB
Some market commentators seem to think the European Central Bank's ABS purchase programme is not the real deal, because it will be limited in size by the low volume of placed securitizations and the difficulty of pricing off-market deals. One research team estimates the ECB might buy €40bn over three years. But this seriously underestimates the potency of the ECB’s move.
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European leveraged issuers need to watch the US
European leveraged loan issuers expect the good times to keep rolling this autumn. But issuers considering cross-border transactions should be cautious. Domestic supply is building in the US and this could mean lenders push back on margins.
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ECB: failure or masterstroke?
The European Central Bank’s announcement of a third covered bond purchase programme is destined for failure. The size of the public market for benchmark covered bonds stands at €570bn, suggesting the central bank would be unable to achieve anything close to its €500bn target through covered bonds alone.
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Dealers should pay for credit ratings
News last week that a minor tweak in S&P’s corporate loan rating methodology could win them back market share in the lucrative new issue CLO market reignited the debate about the business model of issuers paying to be rated. Even if S&P’s internal controls and the Chinese wall which they insist exists between commercial and analytical considerations is robust, market participants clearly do not believe it. It is time to overhaul the way the credit ratings industry works.
Bank Profiles
Latest news by market and league table performance
CLO
| Issuer | Arranger | Size ($M) |
|---|---|---|
| Fifth Street Management, Fifth Street Senior Loan Fund I | Wells Fargo | 309.45 |
| Pinebridge Investments, Galaxy XIX CLO | Citi | 509.90 |
| Apollo Credit Management, ALM XII | Morgan Stanley | 786.00 |
Bookrunners of Global Structured Finance
| Rank | Lead Manager | Amount $m | No of issues | Share % |
|---|---|---|---|---|
| 1 | Citi | 6,651.04 | 23 | 10.49% |
| 2 | JPMorgan | 6,353.00 | 17 | 10.02% |
| 3 | Barclays | 6,181.50 | 19 | 9.75% |
| 4 | Wells Fargo Securities | 5,512.78 | 22 | 8.70% |
| 5 | Deutsche Bank | 4,206.28 | 12 | 6.64% |
Financing Record (MBS)
| Issuer | Price | Total Amount ($ Millions) |
|---|---|---|
| GEDFT 2015-1 | 100.00 | 475.00 |
| GEDFT 2015-2 | 100.00 | 300.00 |
| OMFIT 2015-1 | 100.00 | 72.90 |
Priced Deals
| Issuer | Maturity | Size |
|---|---|---|
| Nationwide | 03-Feb-25 | 1250 |
| Pohjola Bank | 03-Feb-22 | 1000 |
| Nykredit | 500 |
Bookrunners of European Structured Finance
| Rank | Lead Manager | Amount $m | No of issues | Share % |
|---|---|---|---|---|
| 1 | Deutsche Bank | 1,670.59 | 2 | 22.07% |
| 2 | Credit Agricole CIB | 921.35 | 2 | 12.17% |
| 3 | Citi | 858.85 | 2 | 11.35% |
| 4 | Santander | 698.45 | 2 | 9.23% |
| 5 | Cantor Fitzgerald & Co | 613.60 | 1 | 8.11% |
