Securitization - Article Archive

  • Senior CLO debt slashed by 37bp in successful first AMR auction

    The first ever refinancing of a CLO via an applicable margin reset (AMR) auction was a success this week, with BNP Paribas among the winning bidders, trading 73% of the total CLO, according to sources familiar with the matter.

    • 31 Jan 2020
  • Drop Moody’s and leverage up: new Cerberus RMBS boosts triple-A portion

    Cerberus has juiced up its latest UK buy-to-let RMBS deal by dropping Moody’s from the deal, which has a more dismal view of the market than its rival rating agencies. Among other structural changes, this has allowed the private equity firm to enlarge its triple-A tranche by more than 10 percentage points, giving a far more efficient capital structure.

    • 31 Jan 2020
  • First aircraft ABS of 2020 points to weaker lessees becoming the norm

    Carlyle Aviation Partners on Thursday announced a $409m securitization, the first aircraft ABS deal of the year. The high concentration of weaker credit lessees in the offering is an example of one of the many growing pains being felt by the quickly expanding aircraft securitization market, sources said.

    • 30 Jan 2020
  • Pandemic bond to pay World Bank if coronavirus advances

    As financial markets fretted over the spread of a coronavirus outbreak in China this week, one security was in the firing line more directly than any other. Holders of the World Bank’s pandemic bond will lose principal if the disease spreads by a sufficient amount, writes Jasper Cox.

    • 30 Jan 2020
  • Loparex refi loan to price wide as bifurcation bites

    Dutch release liner manufacturer Loparex is launching a €186m term loan B to refinance the equity bridge, put in place by sponsor Pamplona when the company acquired its competitor Infiana last autumn. While the borrowing conditions are exceptionally benign for many, Loparex has struggled to make a good first impression.

    • 30 Jan 2020
  • RBS sells sustainable risk transfer deal to BAE pension fund

    RBS has sold a risk transfer securitization referencing a book of UK green project finance loans to the BAE Systems pension fund, which was advised by a unit of Macquarie. The deal is the first ESG-rated risk transfer deal in the UK, and also potentially the longest-dated risk transfer deal ever done in the UK, with an average life of eight to nine years.

    • 30 Jan 2020
  • RMBS returns as competitive funding source for UK banks

    Nationwide priced a three year UK RMBS this week at 47bp, just 10bp back of a recent three year covered bond from Lloyds. It’s the closest the two products have been in years, and potentially a tight enough spread for UK clearing banks to once again bridge the gap and revive securitization as a major source of funding.

    • 30 Jan 2020
  • CLO players eye disruptive potential of upcoming AMR auction

    On Thursday morning, bids for the first repricing of a CLO via an applicable margin reset (AMR) auction will roll in, bringing to life a concept that has the potential to disrupt traditional practices in the sector.

    • 29 Jan 2020
  • Whole loan sales put solar ABS in the shade

    Solar loan origination volume is on the rise, but that growth has not been visible in the public ABS market as issuers attribute muted volumes to a surge in demand for higher yielding whole loans.

    • 29 Jan 2020
  • Rare sterling supply as Together preps HY refi

    Together Money is preparing to refinance its 2021 high yield bond with a new £385m senior secured issue, the first sterling deal of the year. The storming performance of the euro and dollar markets have meant that, despite the increased post-election appetite for the UK currency, it simply cannot compete on pricing for many issuers.

    • 29 Jan 2020
  • Cerberus adds Citi to Towd Point JLM list, boosts size of senior tranche

    Cerberus has added Citi to its standard syndicate of Bank of America and Morgan Stanley for its latest Towd Point RMBS, which refinances part of the buy-to-let mortgage portfolio it acquired when it bought Capital Home Loans. The new deal is a far more efficient capital structure than the deal it replaces, thanks in part to changes in the rating agency line-up.

    • 29 Jan 2020
  • Gulf Stream revives with first post-crisis CLO

    Gulf Stream Asset Management has returned to the CLO market with its first deal since the financial crisis, selling senior bonds at 137bp over three month Libor on Tuesday.

    • 28 Jan 2020
  • FICO updates in bid to keep up with shifting consumer landscape

    FICO this month released a new credit scoring model that aims to keep tabs on the myriad new ways consumers are taking on debt, including keeping a closer eye on unsecured personal loans. Online lenders, though, say that FICO may be late to the game given the meteoric rise of marketplace lending and the use of alternative data that has been the norm among lenders for several years already.

    • 28 Jan 2020
  • Insurers set to miss mezz opportunity as Solvency II revamp slams shut

    Hopes that insurance investors could flood back into the market for mezz tranches have been dashed, after Europe’s insurance regulator closed its feedback session on revamping Solvency II without mention of any changes to the securitization capital treatment.

    • 28 Jan 2020
  • CIFC hires US high yield team from Millennium

    Alternative asset management firm CIFC has hired a team from Millennium Management to build out its high yield business, as the firm continues to expand the products on offer from its starting point of leveraged loan investments.

    • 28 Jan 2020
  • Restaurant chain brings upsized whole biz ABS on blockchain

    FAT Brands is close to issuing its first-ever whole business ABS secured on the blockchain. The size of the offering, which has been in the works since last September, has been increased to capitalize on the success of the franchise ABS sector in recent months, sources said.

    • 27 Jan 2020
  • Potential loan repricing puts key CLO metric at risk

    CLOs failing a crucial quality test as the market faces a potential wave of leveraged loan refinancings, said analysts at JP Morgan in a report published this week.

    • 27 Jan 2020
  • Kensington, Close Brothers bring deals as spreads tighten

    Kensington is bringing a non-standard UK prime RMBS from its Finsbury Square shelf as spreads on UK RMBS continue to tighten in the first weeks of 2020. Meanwhile, Close Brothers is also returning with a new Orbita Funding UK Auto ABS transaction.

    • 27 Jan 2020
  • River Green takes ‘first step’ toward greener European SF market

    The first European CMBS of 2020 was priced well inside initial price thoughts last week but, although the deal was also the first green-marketed CMBS deal in Europe, market participants said it was difficult to tell how much it benefited from its ESG credentials.

    • 27 Jan 2020
  • BofA promotes two CLO traders to managing director

    Bank of America has promoted CLO traders Ricardo Arguello and Tim Murtha to managing director in New York.

    • 24 Jan 2020
  • Second US Funding Circle deal tightens from debut outing

    UK online lender Funding Circle priced its second US consumer ABS on Thursday, tightening spreads on the bonds compared to its inaugural deal in August of last year on the back of strong demand for short dated consumer ABS paper.

    • 23 Jan 2020
  • Pair of CLOs bring senior spreads to tightest level since November

    Managers priced two CLOs on Thursday, selling the senior bonds at the tightest spread seen since November as 2020 kicks off with a rally in triple-A paper.

    • 23 Jan 2020
  • People moves in brief

    No more Vice at ICE — Barclays places Hill at risk — HSBC picks head of new illiquid credit syndicate unit

    • 23 Jan 2020
  • Nationwide preps new Silverstone as prime market tests pre-Brexit tights

    Nationwide has unveiled a new securitization from its Silverstone master trust, against a market backdrop in sterling prime RMBS as strong as at any time since the global financial crisis. The UK building society is focused on price for the new deal, which is likely to be in three year sterling format.

    • 23 Jan 2020
  • Bonds back on top as Techem changes tack

    High yield bonds are back on top as the capital markets funding tool of choice for leveraged companies. This week, Techem tweaked its loan repricing to add a heavy bond slug and take advantage of near-record low coupons on offer. That sets 2020 up with a very different tone from the past two years, when an ever-growing CLO market meant bonds struggled to compete with loans, writes Owen Sanderson.

    • 23 Jan 2020
  • Asian green bonds build on 2019 momentum

    Green bond volumes reached a record level in 2019 and market participants think the sector is poised for another blow-out year. Korea South-East Power Co (Kosep) and ReNew Power Private gave a further boost to Asia’s growing green bond market this week, selling $750m of notes between them. Morgan Davis reports.

    • 23 Jan 2020
  • CLO market eagerly awaits first ever AMR auction

    The CLO market will be closely watching next week as the first re-pricing of a deal with an applicable margin reset (AMR) feature takes place using an auction. It is a crucial first test of the viability of the alternative CLO re-pricing mechanism, said market participants.

    • 22 Jan 2020
  • Oxford brings rare venture capital-backed ABS

    Venture capital firm Oxford Finance is issuing a $312.8m securitization backed by loans made to life sciences and healthcare companies, the largest deal from the issuer and its fastest return to market since issuing its previous deal.

    • 22 Jan 2020
  • DSB mulls sale of securitized assets to repay investors

    DSB Bank, the Dutch bank that failed in 2009, is considering calling and selling assets from five outstanding securitizations to pay back investors over the next two years.

    • 22 Jan 2020
  • Funding Circle returns to 'red hot' consumer ABS market

    UK marketplace lender Funding Circle is readying its second US ABS deal, a larger offering than its inaugural outing last year, but one that should be eagerly snapped up by investors who say the market for consumer loans deals is red hot.

    • 21 Jan 2020
  • How would UK capital markets handle a BoE rate hike?

    A Bank of England rate hike is in no one's short term thinking. But if it happened, it could be dire for the housing market and therefore, for those parts of the capital markets that exist because of it.

    • 21 Jan 2020
  • Irish securitization could yet survive the 2020 election

    With Sinn Féin down in the polls, securitization investors should cheer at the thought of Fianna Fáil winning the Irish election this year.

    • 21 Jan 2020
  • Deutsche syndicates chunky Cerberus REO financing

    Deutsche Bank has syndicated part of the financing for Cerberus’ acquisition of a large pool of real-estate owned properties (REOs) — houses — from Banco de Sabadell late last year, as part of the bank’s disposals of non-core assets.

    • 21 Jan 2020
  • First green CMBS from Goldman gets guidance

    Goldman Sachs released initial price thoughts (IPTs) for its upcoming River Green Finance 2020, the first such green deal in Europe and the first CMBS of the year.

    • 20 Jan 2020
  • HSBC names head for illiquid credit syndicate unit

    HSBC has appointed Vinay Raj as head of illiquid credit syndicate, a new structure within the firm's global syndicate operations focused on distributing structured finance, infrastructure, real estate and distressed debt.

    • 20 Jan 2020
  • The power of making a fuss

    As head of BlackRock, the largest asset manager, Larry Fink’s pivot to responsible investing in recent years has been influential.

    • 16 Jan 2020
  • Credit Suisse launches aircraft finance unit

    Credit Suisse on Thursday announced the launch of SCALE Aviation, a subsidiary of the bank aiming to boost liquidity in the aircraft industry by providing capital markets financing as well as direct assistance on acquisition, trading and management of aircraft collateral.

    • 16 Jan 2020
  • New issue slow to build, but managers price burst of CLO refis and resets

    A wave of CLO refinancings and resets rolled in this week, fueled by tightening spreads on triple-A paper, with sources expecting the trend to continue alongside a slowly building new issue pipeline.

    • 16 Jan 2020
  • Markets must face up to new deadlines for Libor transition

    Banks should stop issuing loans and bonds linked to Libor by October, according to the Bank of England’s Working Group on Sterling Risk-Free Reference Rates. But the scale of the challenge facing firms, particularly in the loan market, is causing concern.

    • 16 Jan 2020
  • Oil and gas ABS market grows despite push for ESG

    Securitizations tied to oil and gas-related cash flows have emerged in recent months, despite growing support from the buy side for socially responsible investments (SRI). Though they run contrary to environmental, social and governance (ESG) principles, issuance of oil and gas royalty ABS may persist as long as the deals offer attractive yields, or until ESG investments pay a premium to brown ABS. Jennifer Kang reports.

    • 16 Jan 2020
  • People moves in brief

    Ex-Goldman's Weber joins Middle East boutique — Giancarlo turns up at Federal Housing Finance Agency — Ferdane takes over coverage job at BNP Paribas

    • 16 Jan 2020
  • Loan repricing accelerates but can CLOs keep up?

    Some of the largest issuers in the leveraged finance universe are repricing their loans, cutting 50bp or more from their margins on the back of strong market conditions and proven performance since the loans were raised. That is putting pressure on CLO managers and equity holders, whose liabilities are tightening too, but more slowly, blocking repricing of the bonds and squeezing returns, write Owen Sanderson and Tom Brown.

    • 16 Jan 2020
  • Sterling RMBS blowout as non-UK investors return to market

    Issuers priced two sterling residential mortgage-backed securities (RMBS) deals this week, with Precise Mortgage Funding 2020–1B showing an unprecedented five times coverage on senior notes and up to 12 times on the mezzanine tranches, as overseas investors return to the sterling market.

    • 16 Jan 2020
  • FHFA appoints new chair of common securitization platform

    The Federal Housing Finance Agency on Wednesday announced the appointment of J. Christopher Giancarlo as chairman of Common Securitization Solutions, which runs the technology behind the agency’s Uniform Mortgage Backed Security (UMBS) program.

    • 15 Jan 2020
  • Nouryon, Fluidra continue repricing trend in leveraged loans

    Dutch chemicals giant Nouryon is attempting an elephantine repricing of a €5.6bn loan. Nouryon is following Spanish Fluidra, a pool manufacturer, which announced a €300m repricing on Tuesday, and UK-based data company Refinitiv, which set a more favourable price for its €2.33bn loan last week.

    • 15 Jan 2020
  • Sinagpore’s ARA strikes deal to boost Venn Partners’ firepower

    ARA Asset Management, a Singapore-based asset manager focused on Reits, has bought a majority stake in Venn Partners, a secured asset specialist investing in UK and Netherlands assets, in a deal which will boost the firm’s firepower in the mortgage and CRE debt markets.

    • 15 Jan 2020
  • Laying it on FICC: trading helps Goldman and Bank of America

    Fixed income, currencies and commodities trading (FICC) has been the clear area of strength in US bank results so far when compared with the fourth quarter of 2018, particularly in rates and mortgages. Underwriting fees have also come in high, but advisory earnings have suffered.

    • 15 Jan 2020
  • UK’s PRA loosens tight conditions on risk transfer

    The UK’s bank regulator, once one of the world’s toughest, has eased some of its conditions around the synthetic risk transfer market, allowing the UK’s biggest lenders to sell balance sheet CLOs on similar terms to their European Central Bank-regulated peers.

    • 15 Jan 2020
  • NatWest provides subprime car finance facility for Provident's Moneybarn

    Provident Financial Group, the UK specialist lender, has agreed a bilateral securitization facility with NatWest Markets to fund up to £100m of vehicle finance receivables from its Moneybarn subprime brand. The facility is expected to grow to £275m over the next 18 months.

    • 15 Jan 2020
  • Corporate primary faces test in secondary spread behaviour

    European corporate bond specialists are keeping an eagle-like watch on how well new issues trade in the immediate aftermarket. Any widening could kick off a trend towards higher new issue premiums.

    • 15 Jan 2020
  • Middle market to expand as CLO investor interest grows

    The middle market segment of the CLO industry is attracting the attention of more investors this year amid enduring low yields in fixed income as higher returns on middle market paper and stronger covenants steer more traditional CLO buyers into the space.

    • 14 Jan 2020
  • Rating agencies warn on challenging year for aircraft ABS

    The aircraft securitization market is showing cracks after enjoying three consecutive record years of issuance. Major airlines have gone bankrupt, credit is deteriorating and competition intensifying, all of which signals 2020 as a year of major headwinds, rating agencies say.

    • 14 Jan 2020
  • Underwriting, fixed income revenues grow at JPM and Citi

    JP Morgan, Citi and Wells Fargo kicked off the fourth quarter earnings season for investment banks on Tuesday, showing momentum in underwriting revenues and fixed income trading, while advisory fees and equities trading stumbled.

    • 14 Jan 2020
  • Röhm buyout loan returns to syndication

    Advent’s buyout of German chemicals company’s Evonik’s acrylic unit last year is still haunting the leveraged loan market. The banks are relaunching syndication of €977m and $612m of term loan Bs, hoping that investors will find the credit more attractive this time around than when it was first syndicated.

    • 14 Jan 2020
  • Clydesdale puts Citi back in arranger seat for new Lanark RMBS

    Clydesdale Bank has mandated a consortium of banks led by Citi for its prime UK, owner-occupied RMBS Lanark 2020-1, putting Citi back in the role of arranger after two years of Bank of America leading the programme.

    • 14 Jan 2020
  • Libor, loan forgiveness cast shadow over SLABS

    Student loan ABS is facing a host of uncertainties this year, as cessation of Libor as a benchmark quickly approaches and momentum behind loan forgiveness accelerates. Strong technical factors will be offset by headline risk, weighing on spreads, according to sources.

    • 13 Jan 2020
  • Mortgage fintech LendInvest names new CEO

    Online mortgage lender LendInvest has announced that co-founder and CEO Christian Faes is handing over management of the company to Rod Lockhart, who has been named as the new chief executive.

    • 13 Jan 2020
  • Goldman brings first green CMBS deal to Europe

    Goldman Sachs is bringing River Green Finance 2020, the first European commercial mortgage-backed security (CMBS) of the year and the first in Europe to be marketed as green.

    • 13 Jan 2020
  • CrossLend to play into Capital Markets Union drive

    CrossLend’s securitization platform is designed to allow smaller firms to buy and sell debt portfolios more easily. It has been backed by Santander’s venture capital fund, which sees it as tapping into various trends in European capital markets.

    • 13 Jan 2020
  • Constellis default could drive big CLO losses, Moody's says

    Over 200 CLOs could be hit with losses as a result of a default by security and defense firm Constellis, according to Moody’s.

    • 10 Jan 2020
  • Sustainability loans need rating agencies

    The sustainability-linked loan market is a glorious mess.

    • 10 Jan 2020
  • 2020 consumer ABS starts strong as buyers pile into new deals

    The consumer ABS market is off to a strong start, with new issues coming out back to back and leaving the pipeline just as fast. The strong demand is being driven by investors' view of ABS as cheap alternative to corporates, which have rallied since the fourth quarter of last year.

    • 09 Jan 2020
  • World Bank’s cat bonds a win for all, says analyst

    Catastrophe bonds issued by the World Bank have been positive for both investors and the countries receiving protection from the securities, according to one market veteran. The organisation’s activity in insurance-linked securities has been highly innovative but has also received criticism from some quarters.

    • 09 Jan 2020
  • People moves in brief

    Funding Circle picks up former securitization syndicator — Campbell moves from HSBC to RBC — Long-time DCM banker turns up at Aramco

    • 09 Jan 2020
  • New CLO managers flock to Europe to prey on downgrades

    The European CLO market is marking the new year by bracing itself for a series of corporate downgrades. Ellington, a US CLO manager, has been sounding out the European market about bringing an ‘enhanced CLO’ in the first half of the year, which would allow for up to 50% of the portfolio to be debt rated triple-C or below, a far cry from the standard 7.5%.

    • 09 Jan 2020
  • NatWest Markets joins leveraged loan swap market

    NatWest Markets has started to offer currency swaps on leveraged loans, with its first ‘perfect asset swap’ traded in December. It joins just two other banks regularly offering the product, which is crucial for connecting the sterling leveraged finance market to the deep demand created by euro-based CLO buyers.

    • 09 Jan 2020
  • Solar ABS issuer inks $200m solar loan sale

    Residential solar lender Dividend Finance has signed a $200m residential solar loan sale with an institutional investor.

    • 09 Jan 2020
  • Barclays takes Oaktree distressed specialist

    Xavier Clement has joined Barclays’ European credit trading business, working under another former Bank of America Merrill Lynch banker.

    • 09 Jan 2020
  • Former JPM securitization syndicate banker joins Funding Circle

    James Crispin, who formerly ran JP Morgan’s securitization syndicate team for EMEA, has returned to the market as part of marketplace lender Funding Circle’s ABS and capital markets operation, following Funding Circle's switch to sponsoring its own deals last year.

    • 09 Jan 2020
  • Non-QM originator adds senior VP

    Non-qualified mortgage lender Sprout Mortgage has hired a senior vice president of correspondent lending in its Southern California office.

    • 08 Jan 2020
  • Charter Court taps BofA for first sterling RMBS of 2020

    Bank of America is arranging the first sterling RMBS of the year, Precise Mortgage Funding 2020-1B, a £432m deal from Charter Court’s securitization platform.

    • 08 Jan 2020
  • Sonic brings first whole biz securitization of the year

    Fast food chain Sonic is in the market with the first whole business securitization of 2020, with sources saying the deal is already garnering strong interest from investors eager to put new money to work in a sector that had a banner year in 2019.

    • 08 Jan 2020
  • Toyota opens gate for new China auto ABS issuance

    Toyota Motor Finance (China), a Beijing-based wholly-owned subsidiary of Toyota Motor Corp, returned to the Mainland's auto loan ABS market on Tuesday after a two year break. The Rmb4.5bn ($648m) deal was tightly priced.

    • 08 Jan 2020
  • Credit unions new source of growth for auto ABS

    With new vehicle sales in decline, auto ABS issuance is expected to see muted growth in 2020. However, the rising fraction of auto loans funded through securitizations is a silver lining for the industry, along with the potential for more credit union issuers tapping ABS in the coming year.

    • 07 Jan 2020
  • GlobalCapital US Securitization Awards 2020: Call for Nominations

    GlobalCapital is pleased to announce the call for nominations for the 2020 US Securitization Awards.

    • 07 Jan 2020
  • Rabo and JPM bring first STS securitization of 2020

    Obvion has mandated JP Morgan and Rabobank for a Dutch prime RMBS from its Storm programme, the first securitization of the year to receive the ‘simple, transparent and standardised’ (STS) designation.

    • 07 Jan 2020
  • Solar ABS players see ITC step-down as potential boost

    The solar Investment Tax Credit is set to step down and ultimately expire in two years — an expected but still disappointing development for the solar industry. Some, however, see the expiration of the ITC as a boon for solar securitization because it will do away with a complicated feature that has been a hurdle for issuers looking to market deals.

    • 06 Jan 2020
  • DBRS Morningstar appoints head of combined ABS and structured credit teams

    DBRS Morningstar has named two new heads of its combined US ABS and structured credit groups, following Morningstar's acquisition of DBRS last year.

    • 06 Jan 2020
  • Morgan Stanley brings Dutch RMBS with 99% IO loan exposure

    Morgan Stanley is bringing the first European RMBS deal of the year, the Dutch Delft 2020, a €268.3m deal backed almost entirely by interest-only loans.

    • 06 Jan 2020
  • Oodle Finance plans to be ‘repeat issuer’ as balance sheet booms

    Used car finance platform Oodle plans to be a repeat issuer in securitization, following break-neck growth that’s seen originations grow 1,000% since January 2018. The firm is now one of the UK’s largest fintech companies, with a balance sheet larger than media darling Monzo Bank — while the securitization market is becoming increasingly welcoming to fintech firms.

    • 03 Jan 2020
  • Redwood to open 2020 RMBS pipeline

    Redwood announced on Thursday that it is prepping the first RMBS transaction of the new year, a $459.3m deal backed by highly seasoned loans from its Sequoia shelf.

    • 03 Jan 2020
  • Charter Court, TSB Bank, Cerberus, Newday line up for 2020 securitizations

    The new year looks set for a strong start in the securitization market, with SPV filings suggesting that many repeat issuers are already preparing their deals across asset classes.

    • 03 Jan 2020
  • Chinese Christmas present for Aldesa bondholders

    Struggling Spanish construction group Aldesa saw a Christmas bounce in its Caa1-rated bonds, following a December 25 takeover deal and capital injection from China Railway Construction Corporation.

    • 03 Jan 2020
  • Crédit Agricole’s Loynes takes up new syndicate role

    Damien Loynes has been appointed head of syndicate for Europe, the Middle East and Africa at Crédit Agricole.

    • 03 Jan 2020
  • Credit card ABS trading dwindling as big banks hold back

    Once a benchmark ABS sector, credit card bonds experienced a dramatic decline in issuance last year, leading to big drop in trading activity that is expected to continue in 2020.

    • 02 Jan 2020
  • From CMBS to high yield Reit: hospital finance saga nears the end

    Bonds in two pre-crisis CMBS deals backed by UK hospitals, are set to be repaid following a bid from Alabama-based Medical Properties Trust for 30 properties backing the deal. The Reit will fund the deal with recently signed high yield bonds, drawing down the curtain on a saga which has seen the ill-fated 2007 CMBS restructured twice in the last five years.

    • 02 Jan 2020