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GC Asia
Securitization - Article Archive
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Catalonia mortgage law puts RMBS performance at risk
Catalonia has passed a new housing law with the potential to impact RMBS deals with a high exposure to the region.
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CLOs escape cov-lite stricture by borrowing covenants from revolvers
Although European CLOs have a standard limit on the proportion of covenant-lite loans they buy, the definition of ‘cov-lite’ means that almost every term loan with a revolving credit facility elsewhere in the capital structure remains eligible for purchase by these vehicles.
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First senior NPL ABS of recent years tempts five new investors
The first fully public syndicated sale of senior ABS backed by Italian non-performing loans in recent years has tempted five new investors to buy into the NPL asset class. Ten buyers were allocated bonds in the landmark deal, Futura 2019.
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BMW prepares first auto loan ABS of 2020
BMW Automotive Finance is readying a Rmb8bn ($1.15bn) dual-tranche auto loan ABS transaction. The deal, to be sold on February 20, will be the first auto ABS outing in the Chinese market since the Lunar New Year.
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Vote Now: GlobalCapital US Securitization Awards 2020
GlobalCapital is pleased to present the nominees for its annual US Securitization awards, recognizing outstanding achievement in structured finance markets.
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AGL prices $600m CLO transaction
AGL Credit Management has priced a $602.6m CLO deal, the largest transaction so far in 2020.
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Hybrid subprime credit card lender preps ABS
Fair Square Financial is issuing a subprime credit card ABS backed by loans originated through a bank partnership, a feature usually seen among marketplace lenders.
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People moves in brief
HSBC hires Lahham for MENA corporate finance — Lisanti broadens markets role at Citi — Muscatt joins BMO
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Swissies on fire as banks max out
BBVA and BNP Paribas raised Swiss franc bonds on Thursday, following a week of strong issuance from a rich variety of borrowers in the market.
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Sinn Féin set to shake up Ireland’s mortgage sector
While Sinn Féin begins its attempt to form Ireland’s new government, investors and issuers are eyeing a possible overhaul of the country’s housing sector. Securitization is in the headlights, as one of the party’s key manifesto pledges, which promised to throttle the market, is on the negotiating table.
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Loans in Brief: February 13, 2020
Clearstream short term refi one of 2020's biggest European loans — Nordic Aviation Capital finds $858m fortune in US private placements — Marel finds appetite for sustainability loan — Gerald Group increases dollar revolver — Austrian loan market goes clubbing
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UK fiscal splurge cemented as ‘last Mohican’ is ousted
The ousting of Sajid Javid as the UK's chancellor of the exchequer has been interpreted in financial markets as a power grab by prime minister Boris Johnson. Javid's removal is likely to strengthen the government’s bias towards populist economics, “rewriting the Treasury’s fiscal rules”, according to one investor.
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Turkish regulator mulls reforms to unlock risk transfer market
Turkey’s Bank Regulation and Supervision Agency is mulling an overhaul to its rules on risk transfer for banks, which could open a new jurisdiction for the synthetic securitization market, and raise marginal capital for the country’s banks.
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Thiam quits Credit Suisse on fixed income high
Credit Suisse has reported a strong end to last year for fixed income sales and trading, in chief executive Tidjane Thiam’s last week in the job.
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GlobalCapital Syndicated Loan, Leveraged Finance and Private Debt Awards 2019: the full results
GlobalCapital revealed the winners of its annual Syndicated Loan and Leveraged Finance Awards at its Loan Awards Dinner at London’s Sheraton Grand Hotel on Park Lane on February 11. The Awards included GC's new Private Debt Awards. The full results are below. GlobalCapital congratulates all the winners and nominees.
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Pass-thrus, investor deals to boost online loan ABS
Issuance of ABS backed by marketplace loans is expected to get a boost this year, supported by a higher volume of pass-through certificates and investor-sponsored deals, according to Kroll Bond Rating Agency.
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Skipton returns to RMBS after four year break
Skipton Building Society is bringing a prime sterling RMBS with joint arrangers JP Morgan and Lloyds. The issuer last brought a deal in 2016, pausing the programme in light of the UK government’s Term Funding Scheme (TFS).
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No return seen in euro CLOs for Norinchukin
Even after the Japanese financial year-end at the end of March, Norinchukin Bank is unlikely to return to the European market as an anchor investor in senior CLO tranches, according to a CLO manager with knowledge of the bank’s approach.
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Hoist shores up capital with AT1 offer
Hoist Finance is marketing an additional tier one, part of the debt purchaser’s journey back to capital health following a regulatory judgement that wiped 3.7 percentage points off its core equity tier one ratio. The deal follows a landmark non-performing loan securitization called Marathon, which saw CarVal Investors take risk off the Swedish firm’s balance sheet.
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Marble Point prices latest CLO transaction
Connecticut-based CLO manager Marble Point Credit Management has priced a $408m deal via Morgan Stanley.
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Hewlett Packard returns with IT equipment ABS
Hewlett Packard Enterprise is readying its second securitization backed by loans and leases secured by IT equipment. Boosted by scarcity value, sources expect the small ticket equipment to offer better value than all other equipment asset classes this year.
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Sustainability: more stick, less carrot
Sustainable finance players are enthusiastic about regulation, which they expect to bring clarity and order to the market. It may — though when the new EU rules are implemented they are likely to irk participants more than they expect. But what would be really effective are direct actions that bypass finance.
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Goldman preps CMBS to finance Thai conglomerate’s UK hotel buy
Goldman Sachs has announced a deal called Magenta CMBS to finance Thai conglomerate DTGO Corporation’s purchase of 17 regional hotels across the UK from Marathon Asset Management. The deal is the first CMBS linked to Sonia, with the commercial real estate market proving slower than consumer assets classes to switch from Libor.
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Incapital adds four in fixed income with eye on MBS
Fixed income brokerage firm Incapital has added four industry veterans to its distribution platform, aiming to expand into asset classes that offer clients higher returns in a low yield market. The team is particularly reinforcing its RMBS and CMBS coverage.
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Pandemic bond slips as coronavirus spreads
The value of the riskier tranche of the World Bank’s pandemic bond has been discounted — but not by very much — as the coronavirus outbreak infects more people outside of China and therefore comes closer to triggering a payout from the notes.
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Standard Chartered plans to boost CLO trading operation
Standard Chartered is looking to build out its CLO trading capabilities in EMEA, and is in the market for a CLO trader, part of the bank’s broader push into European securitized products.
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Consolidation beginning in private debt as clouds gather
Reports from Pitchbook and Preqin have found an increased concentration of capital in private debt funds. This is giving larger asset managers a whip hand in dealmaking, while smaller funds struggle to raise and deploy capital, and investors seek the safety of big players ahead of an expected downturn.
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Santander scores solution for costly undrawn revolver exposures
Santander has bought credit protection on two portfolios of undrawn revolving credit facilities, taking advantage of a regulatory decision last year to sharply boost the efficiency of the protection. The deal points the way for banks to cut the costs of providing revolvers, which are usually extended as a ‘loss leader’ for a broader banking relationship.
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CLOs and lev loans at the center of 2020 Fed stress tests
The Federal Reserve announced plans to stress test bank holdings of leveraged loans and CLOs during a hypothetical recession in its annual evaluation of the health of the 34 largest US banks.
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Sunnova prices first solar securitization of 2020
Solar finance company Sunnova priced the first solar securitization of 2020, a $313.5m dual tranche offering, on Wednesday.
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Investors see point of sale as next frontier for marketplace loan ABS
Marketplace loan ABS investors are looking at point of sale lending as a potential growth area, as more consumers opt for financing at the checkout counter to avoid boosting credit card balances.
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First Eagle raises $782m for middle market direct lending
First Eagle Alternative Credit on Thursday announced that it has raised a $782m middle market direct lending fund, its fourth such investment vehicle to date.
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People moves in brief: February 7, 2020
HSBC picks regional bosses ahead of expected restructuring — Mizho goes on fixed income hiring spree — Bank of America appoints head of rates trading
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EBA plans to clear up risk transfer tests
The European Banking Authority will be consulting on its approach to risk transfer by the end of the second quarter, with the treatment of excess spread likely to be a crucial topic for issuers and investors in the securitization market.
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UK issuers make strategic return to dollar covered bonds
144A dollar covered bonds issued this week by Santander UK and Nationwide Building Society signal that UK banks have made a strategic return to the asset class after an absence of about 10 years. Their return, which is driven by the need to refinance liquidity borrowed under the Bank of England's Term Funding Scheme, should improve price discovery for dollar denominated securitizations.
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Apollo rolls four CLOs into single massive refi
Apollo Credit Management priced a $2.14bn CLO on Wednesday, pulling together four older transactions and rolling them into a single refinancing.
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Aircraft ABS investors demand more spread as virus fears grow
Investors are looking for more yield on aircraft ABS paper as fear over the coronavirus intensifies globally. With Asia taking up a bigger share of global air travel than during the SARS outbreak in 2003, investors expect the coronavirus to have a bigger impact on the market.
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Storming sterling securitization run continues
The strong conditions in the sterling denominated securitization markets continued this week, with Close Brothers’ Orbita 2020-1 auto ABS priced on Tuesday and Cerberus’s Towd Point Mortgage Funding 2020-Auburn 14 on Wednesday. Both deals saw large oversubscription levels on the relatively limited volume of bonds available, following the precedent set by the RMBS deals that were priced in January.
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Fitch shuffles RMBS, CLO ratings heads
Fitch Ratings on Wednesday announced that it has appointed veterans Kevin Kendra and Derek Miller as head of US RMBS and head of US structured credit, respectively.
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Sound Point cements rapid euro rise with third deal
Sound Point Capital has rapidly expanded its euro CLO platform with a third deal in less than 10 months, speeding ahead of last year’s other market debutants — most of which are yet to print a second deal in euros. The credit manager has access to equity investment through a deal with Canada’s CPPIB pension fund, which may have helped its swift growth.
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Levfin leaves qualms about coronavirus to IG wimps
Carnage in Chinese stock markets apparently has little read-across to European speculative grade credit. Leveraged loan and high yield markets are still wide open, meaning issuers that can refinance are well advised to do so.
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LSTA seeks to shed light on ESG in lev loans
The Loan Syndication and Trading Association this week released a questionnaire for leveraged loan borrowers on their environmental, social and governance policies, seeking to give loan investors more insight into the importance of ESG practices among corporate borrowers.
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ABS research veteran McElravey departs Wells Fargo
Consumer ABS research analyst John McElravey has left Wells Fargo after 13 years with the bank, according to a company spokesperson. McElravey most recently served as the managing director and the head of consumer ABS research.
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Man GLG scores tighter, shorter triple-A
Man GLG Euro CLO VI on Monday printed triple-A notes at 90bp, a new senior tranche tight for 2020 — but with a shorter reinvestment period than its peers. The deal was at first slated for last year, with the original warehouse set to expire in December, but the manager pushed into 2020 and benefited from a broad market rally — and from splitting the equity tranche.
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Lloyds preps second Syon risk transfer securitization
Lloyds is working on another risk transfer deal referencing its high loan-to-value mortgage portfolio, following last year’s debut Syon Securities 2019 issue. Mortgage risk transfer deals are almost unheard of outside the US, thanks to the low risk weights usually applied to performing mortgages, making last year’s Lloyds debut a landmark in synthetic securitization.
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Futura notes a rare chance to buy Italian NPL seniors
Barclays and JP Morgan were this week marketing the senior notes of Futura 2019 for Guber Banca and Varde at mid-300bps over six month Euribor. The deal gives investors a rare chance to buy publicly syndicated investment grade exposure to Italian non-performing loans.
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Mizuho makes swathe of fixed income hires
Mizuho International has hired nine bankers for roles across emerging markets trading and sales, rates, options, securitised products and credit sales and trading. Among the hires, the bank has found a new head of MTNs and appointed a senior emerging markets trader from BNP Paribas.
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Sound Point woos Deutsche CLO primary head
Francis McCullough, former managing director and global head of new issue CLOs at Deutsche Bank, has joined Sound Point Capital Management as the firm's global head of CLO capital markets and structuring.
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Sallie Mae readies new private student loan securitization
Sallie Mae is preparing to sell a private student loan ABS deal, shortly after it announced plans to sell a portfolio of private student loans to fund a share buyback program.
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Morgan Stanley preps direct lending securitization
Morgan Stanley is arranging a trade receivables ABS for Gedesco, a Spanish non-bank SME factoring company, in what will be a rare publicly syndicated term offering in the asset class. Most of the deal, however, is backed by direct lending to Spanish mid-cap firms.
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Link buys Pepper’s European servicing business, targets Greece and Spain expansion
Link Group said it has agreed a €165m deal to acquire Pepper Group’s European loan servicing, asset management and advisory business, which will create a servicing group managing €130bn in assets.
