Securitization - Article Archive

  • RPL market matures, restructures as rates rise

    Credit Suisse is marketing CSMC 2018-RPL8, a new RPL deal. While that comes as investors are beginning to question the merits of that trade as rates continue rise, experienced issuers are learning to counter bearish sentiment with modified deal structures.

    • 27 Sep 2018
  • TCFD adherence grows as Moody’s points to climate risks

    Progress was announced this week on two drives to assess the risk of climate change to businesses. The Task Force on Climate-related Financial Disclosures (TCFD) now has 513 supporters; and Moody’s has updated its environmental risk heat map, showing that 11 sectors with $2.2tr of debt have elevated risk.

    • 27 Sep 2018
  • Deal on measuring impact gets closer as bodies back IMP

    Among the host of sustainable finance-related announcements this week to coincide with the UN General Assembly session in New York, one of the most potentially significant is from the Impact Management Project.

    • 27 Sep 2018
  • Financials boss Edison to retire from EBRD

    Noel Edison, a veteran banker who has run the European Bank for Reconstruction and Development's financial institution operations since joining in 2010, is retiring from the development bank.

    • 27 Sep 2018
  • Loans in Brief

    Loans in Brief: 28/09/2018

    • 27 Sep 2018
  • STS compliant auto ABS unlikely before Q2 2019

    Speakers at the annual TSI Congress in Berlin raised concerns regarding regulators’ lack of industry guidance on data related issues, which could create a bottleneck in the market next year and hold back issuance of simple, transparent, standardised (STS) ABS deals.

    • 27 Sep 2018
  • Loan Ranger Special: Mac’s press-up prowess

    Loan Ranger has dusted off his stetson because something happened at the Loan Market Association’s annual syndicated loan conference that he had never seen before in all his many years covering the loan market: public exercise that wasn’t dancing in Harry’s Bar at 2am after a drinks event.

    • 27 Sep 2018
  • Lower loan recoveries but more repricing on the way, says Wells

    Wells Fargo analyst David Preston said that weaker loan recoveries were the "number one fundamental issue" for CLO investors at the ABS East conference in Miami this week, while managers anticipate a resurgence of loan repricing activity that will put pressure on returns in the structures.

    • 26 Sep 2018
  • Affordable housing comes into focus ahead of US midterms

    Two political initiatives in the US have raised the prospect of public subsidies for low-income housing and rent controls, a move that real estate investment trusts are keen to resist.

    • 26 Sep 2018
  • Fitch downbeat on Spanish distressed property recoveries

    Excess housing supply and buyer affordability concerns will continue to plague recovery prospects for distressed Spanish properties, despite recent house price growth and better economic outlook for the country, notes Fitch Ratings.

    • 26 Sep 2018
  • Digital mortgage lending grows, but still draws skeptics

    Digital underwriting of mortgages can improve accessibility and cut back on red tape, proponents say, but some observers are still expressing skepticism over algorithmic mortgage lending.

    • 25 Sep 2018
  • Maintenance covenants key to middle market loan returns, say managers

    As capital pours into leveraged loans and private credit, direct lending platforms are mounting a defence of covenant protections in smaller sized deals to protect recoveries in the next downturn.

    • 25 Sep 2018
  • Payday lending: a social ill that needs a social bond

    The demise of Wonga.com brought the payday lending industry back into the public consciousness. With socially minded investors scrambling to find assets, this industry seems ripe for intervention via social financing.

    • 25 Sep 2018
  • CLO veteran joins GreensLedge

    Peter Melichar, a veteran CLO banker, has joined GreensLedge Capital Markets in London.

    • 25 Sep 2018
  • HSBC mutiny memo is a chance for Flint to show character

    The lengthy complaint about HSBC management drafted, purportedly, by investment bankers within the firm must be taken seriously and investigated, if its new CEO John Flint wants to win the confidence of the rest of the staff and shareholders.

    • 25 Sep 2018
  • Natural disasters could spark demand for PACE

    The emergence of more regulation for the nascent property assessed clean energy (PACE) sector has put the brakes on loan origination and deal volumes this year, but issuers say a raft of natural disasters in the US over the past year have stimulated more interest in using the product to help protect homes from damage.

    • 24 Sep 2018
  • CRT, single security to define GSEs in 2019

    The growth of the credit risk transfer (CRT) market and the debut of the uniform mortgage-backed security (UMBS) in June 2019 may represent some of the most substantial post-crisis housing reform.

    • 24 Sep 2018
  • Recession? Don’t count on one, say economists

    Asked when they expected the US to enter a full-blown recession, economists from the Milken Institute and Credit Suisse said at ABS East on Monday they doubted there would be one at all. But they called on the structured finance industry to help regulators get more comfortable with the flow of capital into private debt.

    • 24 Sep 2018
  • Panel tells ABS pros not to sweat the credit cycle

    The credit cycle is in its late stages but material distress in consumer credit is unlikely to be seen for some time, said panelists speaking on the state of the consumer ABS market on day two of ABS East.

    • 24 Sep 2018
  • Blurred investor, issuer lines a ‘seismic shift’ in ABS

    One of the biggest changes in securitization since the financial crisis has been the increasingly common commingling of issuer and investor groups within the market, said participants at the ABS East conference.

    • 24 Sep 2018
  • Investors stick to their favourites in maturing CLO market

    Balanced, buoyant, fragile, resilient? The divergence of views on show during a panel discussion on CLOs in Miami on Monday revealed a market that is enjoying record volumes, but is also facing a range of challenges such as more complex documentation, riskier loans, spikes in refinancing activity and the evergreen issue of a lack of triple-A buyers.

    • 24 Sep 2018
  • US ABS investors add Fed unwinding, tax reform to list of issues

    While the ABS markets have continued to build momentum each year since the financial crisis, investors are seeing a mix of good and bad on the horizon as capital flows extensively into burgeoning corners of the market and the Federal Reserve continues apace with its normalization of monetary policy.

    • 24 Sep 2018
  • Downgrades may tie managers’ hands in downturn

    CLO managers have long highlighted their ability to generate investor returns by actively managing their portfolios during market downturns, but that may be harder to do during the next slump because of deteriorating loan underwriting, said panellists at IMN’s ABS East conference on Sunday.

    • 24 Sep 2018
  • Surging market puts ABS East over the top, with nearly 5,000 expected

    A booming securitization market and a last minute pop in registrations will bring nearly 5,000 ABS market pros to Miami Beach for this year’s ABS East conference, as attendees look to get the pulse of an aging credit cycle and an outlook on what to expect as the market nears its peak.

    • 24 Sep 2018
  • Trafigura lands new ABS investors off the beaten track

    Geneva-based Trafigura increased the size of its fifth public ABS receivables deal and tightened pricing in response to strong investor interest, thanks to an extensive marketing effort.

    • 24 Sep 2018
  • Solar financing is competitive, but expect ABS to thrive

    If there is any pessimism regarding the future of solar securitization, few in the sector are letting on.

    • 24 Sep 2018
  • Blurring of issuer, investor lines marks ‘seismic shift’ in ABS since crisis

    Participants at the ABS East conference this year have commented to GlobalCapital that one of the biggest changes in securitization since the financial crisis has been the increasingly common commingling of the issuer and investor groups within the market. This means that issuers are holding onto more risk towards the bottom of the stack to get investors comfortable with their underwriting, as well as more investors buying assets to then turn around and securitize them.

    • 24 Sep 2018
  • CRT, UMBS to define Fannie and Freddie in 2019

    While there are no plans to release the government-sponsored enterprises (GSEs) of Fannie Mae and Freddie Mac from government conservatorship in the near future, the growth of the credit risk transfer (CRT) market and the debut of the uniform mortgage-backed security (UMBS) in June 2019 may represent some of the most substantial post-crisis ‘housing reform’.

    • 24 Sep 2018
  • World Benchmarking Alliance launches ambitious SDG league tables

    On Monday evening in New York, a coalition of investors, NGOs and other parties publicly launched the World Benchmarking Alliance, an initiative to give investors free information about which companies are best at bringing about the UN Sustainable Development Goals.

    • 24 Sep 2018
  • Atom Bank launches inaugural RMBS while Lloyds seeks Penarth credit card ABS tap

    Sole arranger Lloyds announced the inaugural prime UK RMBS deal – Elvet Mortgages 2018-1 – for Atom Bank on Monday. BNP Paribas and Lloyds are joint leads.

    • 24 Sep 2018
  • Housing regulator braces for major change in 2019

    Mel Watt, director of the Federal Housing Finance Agency (FHFA), has vowed to stay on until 2019 despite accusations of sexual harassment. Even if he sees through his term, however, what comes next could reshape the regulator and the market it oversees.

    • 24 Sep 2018
  • UBS hires for NPL structuring

    UBS has hired an ex-Deutsche Bank banker to structure securitizations, with a particular focus on NPL portfolios — a big change for an investment bank that closed its securitization operations in 2012.

    • 21 Sep 2018
  • Mortgage refi share ticks up in August, bucking trend

    Despite a temporary uptick in the US mortgage refinancing rate in August this year, rising interest rates are weighing on refinancing activity which is pushing issuers to be more creative in how they extend credit to borrowers, according to some market observers.

    • 20 Sep 2018
  • Bank funding plans point to uptick in euro ABS issuance

    European banks are forecasting a 6.2% increase in total assets over the coming three years and expect to fund some of that growth with more secured debt sales, according to the results of a European Banking Authority (EBA) survey published this week.

    • 20 Sep 2018
  • Dollar demand swarms for aggressive LBO debt

    US investors have scrambled for the bonds and loans backing leveraged buyouts of Thomson Reuters’ Financial & Risk business and Dutch chemical company AkzoNobel, with pricing coming tighter than initial thoughts despite aggressive covenant packages.

    • 19 Sep 2018
  • US MBS investors await year end flurry with caution

    Private label RMBS is set to have its busiest year ever since the financial crisis. But investors are only cautiously welcoming the upswing in volumes, which is being driven by new kinds of mortgage credit backed by a broader range of borrowers.

    • 19 Sep 2018
  • Former co-head of BlackRock CLO biz joins Tetragon

    Scott Snell, former co-head of BlackRock’s US CLO business, has joined Tetragon Credit Income (TCIP) as a CLO portfolio manager, with the firm planning to expand the range of its investments in CLOs.

    • 19 Sep 2018
  • Aussie issuer mulls euro tranche for RMBS

    Australian mortgage lender Liberty Financial is marketing its latest prime RMBS deal — Liberty 2018-3 — and is looking to drum up interest for a euro denominated tranche to be included in the capital structure.

    • 19 Sep 2018
  • BMW drives off with chunky BavSky China ABS

    BMW Automotive Finance (China) Co priced a Rmb4.5bn ($656m) Bavarian Sky China 2018-1 securitization this week, its largest China auto ABS deal to date.

    • 19 Sep 2018
  • Trio of new RPL deals puts pressure on tightening trend

    Senior re-performing loan (RPL) RMBS spreads have tightened by 4bps to 73bps over swaps in the last week, according to Wells Fargo data, their tightest level since mid-June. But a flurry of new deal activity has the potential to push spreads back out, giving the buy side some room on pricing.

    • 18 Sep 2018
  • NY Fed winds down last of Bear Stearns bonds

    The Federal Reserve Bank of New York said on Tuesday it had completed the sale of the remaining securities in the $30bn Maiden Lane LLC portfolio of mortgage securities it bought to facilitate JP Morgan’s acquisition of Bear Stearns in March 2008.

    • 18 Sep 2018
  • Paragon on track to hit BTL lending targets

    Paragon Banking Group is is confident that the buy-to-let (BTL) market will boost its lending momentum for the rest of the year, despite recent data showing a slowdown in the sector, with the lender looking at a pipeline that is scheduled to beat its 2017 figures by 25%.

    • 18 Sep 2018
  • Florence damage projected to bypass cat bonds

    Tropical storm Florence — downgraded from hurricane status — has flooded North Carolina. It is unlikely to hit catastrophe bond holders very hard, although one issue from the US’s National Flood Insurance Program (NFIP) is under scrutiny.

    • 18 Sep 2018
  • MS moves Burke to target US NPLs

    Morgan Stanley has transferred one of its senior structured finance bankers to New York as part of an initiative to win more business from US financial institutions looking to shift problematic consumer loans off balance sheet.

    • 18 Sep 2018
  • EC’s guarantee fund a useful ally for markets

    The European Commission has unveiled a portfolio of financial guarantee transactions it is doing to support development in Africa and regions bordering the EU. Among them are two programmes conducted by the African Development Bank, including its new synthetic securitisation.

    • 18 Sep 2018
  • AfDB leads diverse push for SSA risk transfer

    The African Development Bank’s $1bn synthetic securitization is not its first risk transfer transaction, and will not be its last. The bank has marked itself out as a leader in this sphere, though the effort to get such techniques to work is also highly collaborative.

    • 18 Sep 2018
  • Breakthrough for supra ABS as AfDB debuts

    The African Development Bank has become the first supranational bank to use a securitization sold to private investors to free up balance sheet capacity. The deal, four years in the making, demonstrates a new technique that could expand development banks’ firepower to promote development.

    • 18 Sep 2018
  • Trio of US CLOs price as JPM raises refi forecast

    The US CLO market is on track to match and possibly exceed last year’s record volumes for new issue deals, according to JP Morgan on Monday, but the bank has raised its forecast for refinancing and reset transactions as more managers look to boost equity returns in a tight loan market.

    • 17 Sep 2018
  • MBS markets steady despite hurricane headwinds

    Hurricane Florence is giving MBS investors some jitters after last year’s damaging hurricane season, but the markets are holding up, despite risks posed to the bonds by natural disasters.

    • 17 Sep 2018
  • Refinitiv boosts loans, slims bonds in buyout package

    Banks leading the financing package for Blackstone’s leveraged buyout of Thomson Reuters’ Financial & Risk business — soon to be renamed Refinitiv —have shifted some of the funding away from the bonds and into the loans, increasing leverage in the deal and mirroring the issuance trends seen in leveraged finance this year.

    • 17 Sep 2018
  • Natixis brings credit card deal as primary pricing boosts sentiment

    The mood in euro ABS has been steadily improving in recent weeks, with sentiment growing rosier still following strong pricing for primary market offerings last week and the announcement of a new French credit card ABS deal adding to new supply.

    • 17 Sep 2018
  • Insurers, cap markets brace as Florence makes landfall

    With Hurricane Florence descending upon North and South Carolina in the US on Friday, markets will be waiting for the impact on insurance firms and catastrophe bonds.

    • 14 Sep 2018
  • September 15, 2008: the day markets changed

    Traders, bankers, lawyers, brokers tell their stories of what happened when Lehman Brothers went down, how it ruined some businesses and created room for others, and how it has changed financial markets — for better and worse.

    • 13 Sep 2018
  • Second largest CMBS conduit deal of 2018 hits market

    One of the biggest conduit deals of 2018 is in the market this week, backed by around $1.6bn of retail and office properties across the US, according to term sheets seen by GlobalCapital.

    • 13 Sep 2018
  • Bullish investor demand for euro ABS on display

    Hefty demand and oversubscribed order books for Mercedes’ Silver Arrow UK 2018-1 auto ABS deal and Virgin Money’s Gosforth Funding 2018-1 UK Prime RMBS may be an indication of stronger sentiment in euro ABS markets following a tough summer.

    • 13 Sep 2018
  • Heat builds in US middle market as regulators loosen restraints

    Billions of dollars are flowing into direct lending funds targeting US corporate loans to small and medium sized companies, despite signs of weakening underwriting. Unshackling leverage constraints on business development companies and reopening the CLO market to them after a two year absence may further overheat the market, say critics.

    • 13 Sep 2018
  • ‘Have you forgotten your brothers?’

    Those at Lehman Brothers on Monday, September 15, 2008 will remember the moment the lines between the London and New York offices went dead.

    • 13 Sep 2018
  • FHFA makes way for big reform of agency MBS market

    The Federal Housing Finance Agency (FHFA) officially proposed changes to US administrative laws to align market activities at the US government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, on Wednesday. The changes would eliminate differences between the GSEs’ securities by 2019.

    • 12 Sep 2018
  • Refinitiv deal heats up with euro portion set to be slimmed

    The Blackstone-led consortium of investors buying out Thomson Reuters’ Financial & Risk business is understood to be looking to decrease the amount of financing it needs from the euro market for the deal’s $13.5bn debt funding package, with demand appearing better for dollar bonds, according to investors.

    • 12 Sep 2018
  • Demands revs up for Mercedes sterling auto ABS

    Mercedes’ Silver Arrow UK 2018-1 auto ABS deal has managed to secure over £750m of orders so far, with books still open ahead of pricing expected on Thursday. Solid demand has allowed price guidance to tighten from initial talk.

    • 12 Sep 2018
  • Aon tasks team with resolving protection gap

    Seventeen years ago, the 9/11 attacks were a black swan event for financial markets and the broader economy. Now, insurance firm Aon is examining terrorism risk as part of a wider aim to close insurance protection gaps and transfer risk to the capital markets.

    • 12 Sep 2018
  • Greystone markets CRE CLO with sole exposure to healthcare

    Greystone Health has come to market this week with Greystone CRE 2018-HC1, a commercial real estate CLO backed by a $249.2m portfolio of loans on healthcare assets, including transitional loans for independent living facilities, assisted living facilities and skilled nursing facilities.

    • 11 Sep 2018
  • SEC frees BDCs with no-action letter on risk retention

    The SEC has issued a no-action letter that will allow Golub Capital and other middle market lenders to issue CLOs through a business development company (BDC) without falling foul of conflicting regulations covering risk retention and investment companies, a move that could be a further boost to US middle market corporate lending.

    • 11 Sep 2018
  • Banco Santander Totta gauges interest for NPL exit

    JP Morgan has been mandated as sole arranger and lead manager by Banco Santander Totta to explore investor interest for its Portuguese non-performing loans (NPL), according to an email to investors seen by GlobalCapital.

    • 11 Sep 2018
  • Softer euro ABS spreads: a gift to the buy side

    The small, but noticeable, downward shift in investor appetite for new issue euro ABS bonds over the past few months has meant that bank syndicates and issuers have had to work a bit harder to cajole investors and get deals done.

    • 11 Sep 2018
  • BMW readies first China auto ABS of the year

    BMW Automotive Finance (China) Co is making its first foray into the ABS market this year, with bookbuilding for the Rmb4.5bn ($656m) Bavarian Sky China 2018-1 set to start next Monday.

    • 11 Sep 2018
  • Bank holding preferences could hit MBS market

    Large US banks are shifting their mortgage bond exposure into hold-to-maturity accounts to dodge the impact of rising interest rates on their regulatory capital holdings, a trend that could undermine market performance in the long run, according to JP Morgan analysts.

    • 10 Sep 2018
  • Barclays eases Irish RMBS into primary pipeline

    Four months after acquiring a €5bn Irish mortgage pool from Lloyds, Barclays announced an RMBS transaction to securitize part of it last Friday.

    • 10 Sep 2018
  • Aldermore debuts UK RMBS after long absence

    Arrangers and joint leads JP Morgan and Lloyds are marketing Oak No.2 Plc – a prime UK RMBS from challenger bank Aldermore, according to an announcement last Friday.

    • 10 Sep 2018
  • Funding Circle US inks $1bn loan deal with Alcentra

    Small business lender Funding Circle announced on Friday that it had launched a new strategic partnership with Alcentra, with the global asset manager to purchase up to $1bn of the firm’s US business loans over the next three years.

    • 07 Sep 2018
  • Fannie issues breakout multifamily credit insurance risk deal

    Fannie Mae has issued a credit insurance risk transfer (CIRT) deal tied to an $11bn pool of multifamily loans, kicking off what the government-sponsored enterprise says will be a regular issuance program going forward.

    • 06 Sep 2018
  • Investors take control as euro ABS spreads move wider

    European ABS issuance has had a bumper year so far, helped by rejuvenated CMBS supply that was largely absent over the past two years, banks looking to tap more RMBS funding as cheaper alternatives wind down, and a CLO market which shows no sign of slowing. With heavy supply flowing into the market, spreads have widened since mid-July, putting investors at the helm. Asad Ali reports.

    • 06 Sep 2018
  • TwentyFour AM hires new credit head from Créd Ag to lead US push

    TwentyFour Asset Management has appointed a new head of US credit in New York, and is planning to make a possible six further hires in the city next year as the London-based firm looks to expand its presence in US credit markets.

    • 06 Sep 2018
  • Mercedes to test sterling market with auto ABS

    Following on just two months after pricing a euro denominated Silver Arrow deal, Mercedes is back in the primary ABS market, this time with a sterling deal, marketing the bonds in a choppier market.

    • 06 Sep 2018
  • Just Group considers RT1 amid capital concerns

    UK insurer Just Group said in its half-year results on Thursday that it had the flexibility to issue tier two or restricted tier one capital, amid worries about the impact on its capital of the Prudential Regulation Authority’s proposal for equity release mortgages.

    • 06 Sep 2018
  • Deal flow picks up as SLABS, RMBS deals enter pipeline

    Deal flow is picking up across US structured products midweek, with investors offered a smattering of securitized assets including a Sallie Mae private student loan deal and a non-agency RMBS offering from Flagstar.

    • 05 Sep 2018
  • Barratt surprises with UK home building uplift

    Barratt Developments said on Wednesday that its UK house completions have posted the "highest volumes in a decade", delivering some optimism to a market which has recently seen a dip.

    • 05 Sep 2018
  • SRI Award Winners 2018 revealed

    GlobalCapital announced the winners of its Sustainable and Responsible Capital Markets Awards 2018 in Amsterdam on Tuesday evening. This year’s two sovereign debut green finance issues, from Indonesia and Belgium, won Deals of the Year in their regions, and there were double laurels for Danone, in both the bond and loan markets.

    • 05 Sep 2018
  • Consumer spreads settle with moderate supply expected

    Investors have crept down the capital stack in search of higher yields this year, weighing on the appetite for senior US consumer ABS bonds, though spreads have stabilised according to Wells Fargo, with moderate supply expected this month.

    • 04 Sep 2018
  • Price talk emerges on Thomson Reuters buyout loans

    Arranging banks have released price talk on the $8bn of loans financing the leveraged buyout of Thomson Reuters’ Financial & Risk business.

    • 04 Sep 2018
  • Yorkshire Building Society primes UK RMBS

    Brass No.7, a prime sterling UK RMBS from Yorkshire Building Society, hit the market this week, lining up behind a sterling buy-to-let (BTL) RMBS already in the pipeline. The deals will give market players a glimpse of where sterling ABS is pricing as summer winds down.

    • 04 Sep 2018
  • Investec fashions new position for LBOs

    Investec has filled a newly created sales position with a hire from UniCredit in a bid to expand its leveraged buyouts business.

    • 03 Sep 2018
  • Spire Partners boosts CLO team with credit hire

    Spire Partners has hired Sumeet Sikka as senior credit analyst to provide generalist coverage as the CLO firm grows assets under management and looks to broaden the companies on its radar.

    • 03 Sep 2018
  • NPL, AT1 sales buttress Bank of Cyprus’s capital

    Fund investors have taken on the senior debt supporting a €1.4bn acquisition of a Bank of Cyprus non-performing loan portfolio by Apollo Global Management last week, despite its lack of a rating.

    • 03 Sep 2018