Securitization - Article Archive

  • GlobalCapital’s best 2020 articles on European securitization

    When the year began, the European securitization market forecast a busy year for itself. Issuance levels in markets from synthetic risk transfer to CLOs had broken issuance records in 2019, with the year ahead expected to match if not outpace the previous year's volumes. Instead, the market found itself grappling with an outbreak which would close up issuance for months and set a new course for ABS. Linked below is a collection of GlobalCapital’s best securitization articles of 2020.

    • 23 Dec 2020
  • UK issuance in 2021 hinges on knife-edge Brexit talks

    Talks between the EU and the UK over their are future trading look to be coming to a head before the latter reaches the end of its transition agreement with the former on December 31. If the two can strike a deal, UK capital markets will be the first to feel the positive effects. Deal makers are hopeful of a surge in activity should an agreement be found but border chaos between the UK and EU earlier this week provided a sobering warning.

    • 23 Dec 2020
  • Biden and climate: four short cuts to a greener US

    The world is watching full of hope as Joe Biden prepares to take the helm of the world’s most important economy. He has promised to act decisively on climate change, which must include financial reform. There is much worthy work to do — but four things would save Biden a lot of time.

    • 23 Dec 2020
  • Analysts predict US CLO upgrades for 2021

    The percentage of triple-C rated loans held in US CLOs has declined in the last quarter, a trend that CLO players believe will continue into next year.

    • 22 Dec 2020
  • Latham & Watkins strengthens capital markets team with new hire

    Law firm Latham & Watkins hired Alison Haggerty to join its New York office as a partner in the capital markets practice.

    • 22 Dec 2020
  • UK mortgage binge may give boost to flagging RMBS origination

    The UK mortgage market has had its busiest year since 2007 following the government’s increase in the stamp duty threshold at the beginning of the pandemic, which could prove a source of prime UK RMBS supply in 2021.

    • 22 Dec 2020
  • US CLO managers rush to price deals ahead of holidays

    CLO managers in the US are rushing to price CLOs before the market shuts for Christmas, with five deals at various stages of marketing.

    • 21 Dec 2020
  • LendingPoint closes last consumer loan ABS of the year

    Online personal lender LendingPoint closed its fourth ABS of the year, and one of the last few consumer deals to be priced before rules change in January. The regulatory pendulum is expected to swing next year, with US government agencies starting to keep a closer eye on consumer-facing companies.

    • 21 Dec 2020
  • 2020 the worst year for euro ABS issuance since financial crisis

    European ABS issuance is closing the year with the lowest volumes since 2009, with the Covid-19 economic turmoil and cheap central bank liquidity having deterred issuers from coming to market.

    • 21 Dec 2020
  • New framework for on-balance sheet securitizations a mixed bag, says AFME

    The Association for Financial Markets in Europe (AFME) has praised new framework for on-balance sheet securitizations in Europe, but warned that it may also make deals more costly and complicated.

    • 18 Dec 2020
  • GlobalCapital China 2020 awards winners: Part II

    In the second part of GlobalCapital China’s awards announcements, we reveal the winning banks across Panda bonds and ABS, as well as the best bank for securities services.

    • 18 Dec 2020
  • GlobalCapital China announces 2020 awards winners: Part I

    GlobalCapital China is pleased to announce the winners of its annual awards, recognising the banks, issuers and individuals that have made the biggest contribution to developing China’s onshore markets. In part one, we reveal the most impressive issuers in the FIG, corporate and SSA categories.

    • 18 Dec 2020
  • Biden victory points to new securitization backdrop

    For many investors, the US election landed in the best possible place — a Joe Biden win with a split Congress, ensuring a strong pandemic plan, yet blocking radical change. But Biden’s leadership will reshape securitization markets through changes to critical regulatory agencies, setting the tone for the next four years in consumer credit, mortgages and green securitization. Jennifer Kang reports.

    • 17 Dec 2020
  • Could mortgage holidays return after Covid crisis ends?

    During spring and summer of 2020, mortgage borrowers in the UK took full advantage of the chance for a payment holiday, with some non-conforming mortgage portfolios seeing payments stop on up to 40% of loans. But investors in RMBS stayed largely sanguine, despite the looming rise in unemployment and the potential for holidays to turn into defaults. Could the moratorium make a comeback in the next crisis? Tom Brown reports.

    • 17 Dec 2020
  • CLO winners to dominate recovering 2021 market

    The US CLO market has been to hell and back in 2020. From the depths of the March sell-off, the sector has faced huge challenges but has seen a remarkable comeback. Bullish sentiment is back on for Q4, and that defines the outlook for 2021. Not all managers will be well placed to take advantage, however, and a wave of consolidation probably looms. By Paola Aurisicchio.

    • 17 Dec 2020
  • New plan for CMU but same old lack of harmonisation

    In tumultuous times, the EU’s Capital Markets Union project continues to plod on. As it it is limited by member states not harmonising certain laws, this is not all the European Commission’s fault, but that hasn’t stopped criticism that the executive body has underdelivered. Jasper Cox reports.

    • 17 Dec 2020
  • Red states, blue states, green States?

    After four years of the US government noisily refusing to protect humanity from climate change and pushing back on responsible investing, sustainable finance supporters are full of hope that Joe Biden’s presidency will shift the US — and the world — in the right direction. Jon Hay reports

    • 17 Dec 2020
  • UniCredit innovates with first NPL lease securitization

    UniCredit has structured the first non-performing real estate lease securitization in Italy, disposing of part of its leasing business in order to navigate complex legal challenges around managing repossessed properties.

    • 17 Dec 2020
  • CLO refis and resets take off as triple-A spreads tighten

    A wave of CLO refinancing has rolled out in the last seven days, as spreads on triple-A notes have tightened markedly. The trend, which bucks the pattern earlier this year when refinancing slowed, is set to continue early in 2021.

    • 17 Dec 2020
  • People news in brief

    Nick Jansa turns up at Canadian pension fund — Rocket man touches down at Citi — Credit Suisse hires Gaurav Arora

    • 17 Dec 2020
  • EIB partners with Luminor for Baltic risk transfer

    The EIB and EIF have guaranteed a synthetic securitization issued by Luminor Bank to support SMEs and mid-caps in the Baltic States.

    • 17 Dec 2020
  • ‘Unambitious’ European NPL package falls flat

    The European Commission’s plans to tackle the mountain of non-performing loans that are expected next year as government support schemes roll off have been criticised as unambitious. They have been dismissed as containing little beyond a review of proposals that have already been unveiled.

    • 17 Dec 2020
  • No bids for Trafford Centre as retail outlook darkens

    The Canada Pension Plan Investment Board (CPPIB) has taken over Manchester’s Trafford Centre after failing to find an alternative buyer. It chose to acquire the property after the collapse of shopping centre owner Intu.

    • 16 Dec 2020
  • Senior MD set to leave First Eagle in January

    Brian Good, a veteran of leveraged finance investing and a key figure in implementing ESG factors in investing process, is set to leave First Eagle Alternative Credit in early January, according to people familiar with the matter. Good will remain an ESG consultant at the Boston-based credit manager.

    • 16 Dec 2020
  • Eisenberger promoted co-head of US CLO team at Sculptor

    Sculptor Capital Management has promoted managing director Josh Eisenberger to co-head of its US CLO team, overseeing portfolio management and credit underwriting, according to people familiar with the matter. Eisenberger will work alongside Peter Polanskyj, co-head of the US CLO team with a focus on structuring and origination.

    • 15 Dec 2020
  • Golub Capital prices second TALF CLO

    Golub Capital Partners has priced its second CLO eligible for funding under the Term Asset-backed Securities Loan Facility (TALF), a programme established by the US Federal Reserve after the Covid-19 crisis first hit. TALF expires at the end of the year, and will only have been accessed by Golub.

    • 15 Dec 2020
  • SRT market falls short of 2020 hopes

    The significant risk transfer market is usually at its busiest in December, as issuers hope to gain balance sheet benefits by year-end. But 2020 has seen a pullback from investors who have blamed a lack of credit data brought about by Covid-19 payment moratoria.

    • 15 Dec 2020
  • Draghi and Rajan-led group offers fixes for corporate distress

    A G30 committee led by Mario Draghi and Raghuram Rajan has outlined proposals for governments looking to deal with the surging corporate distress caused by the pandemic. The paper, published on Monday, recommends better restructuring laws, equity infusions, business interruption reinsurance and targeted credit for the most vulnerable companies.

    • 15 Dec 2020
  • CIFC priced the tightest CLO with five year reinvestment period

    CIFC Asset Management has priced the tightest post-Covid CLO with five-year reinvestment period, a deal which also includes the new more flexible language to allow managers to preserve value in distressed situations.

    • 14 Dec 2020
  • Moody’s readies mass CLO upgrades on methodology change

    Moody’s has put 188 CLO tranches issued by 114 US CLOs on review for possible upgrade, following a change in how its CLO methodology treats leveraged loans on negative watch. But the shift will make it harder to analyse CLO quality, as weighted average ratings will be dispersed more widely and documentation differences will become more important.

    • 14 Dec 2020
  • Brexit ABS fix could ease docs burden for investors

    When the Brexit transition period ends on December 31, ABS deals listed on EU stock exchanges will become private deals for UK investors, and vice versa for UK deals. The change could ease the regulatory burden for some investors active in the market.

    • 14 Dec 2020
  • European Parliament agrees securitization deal with added sustainability criteria

    The European Parliament and Council have agreed rules that will set the stage for securitization to play a role in helping European banks dig their way out of an impending surge in defaulted loans. The Parliament has added sustainability criteria to the final amendments.

    • 11 Dec 2020
  • CLO managers seek flexibility for fair fight with distressed funds

    CLO managers are seeking more influence on the outcome of restructurings, baking additional flexibility into deal documents to avoid being blindsided by more flexible distressed debt funds better equipped to extract value from corporate restructuring negotiations. New CLOs are adding extra space for loss mitigation loans while older deals are seeking investor consent amend their docs.

    • 10 Dec 2020
  • Banks face headaches over ABCP conduit concentrations

    European banks are looking to reduce their cost of funding by fitting their asset-backed commercial paper (ABCP) transactions with the ‘simple, transparent and standardised’ (STS) regulatory stamp. Fresh regulations are causing headaches for the issuers, however, prompting increased concerns about the effectiveness of the label.

    • 10 Dec 2020
  • Debt buyer Axactor preps for 2021 NPL flood

    Axactor, a Norwegian debt purchaser firm, has launched a refinancing of its €200m 2021 bond alongside a rights issue, and a clean-up of its capital structure, which will "increase its capacity for new investments in a highly attractive NPL market".

    • 10 Dec 2020
  • Hayfin returns to US CLOs after 18 months

    Hayfin Capital Management returned to the US CLO market with a new issue after its first American transaction in June 2019. CLO supply is expected to be strong into year-end, with another 13 deals at least to be priced before Christmas.

    • 09 Dec 2020
  • NPL specialist sees ‘potential doubling’ of current stock in 2021 surge

    NPL specialist Balbec Capital, which purchases defaulted portfolios at risk of foreclosure using securitization structures, is expecting an increase in opportunities to buy in 2021. Current NPL stock levels could double once government stimulus runs out, said the firm.

    • 09 Dec 2020
  • Solar ABS issuer Mosaic refreshes top management

    Residential solar finance company and securitization issuer Mosaic has refreshed its leadership team with the appointment of a new CFO as well as a deputy chief credit officer and general counsel.

    • 08 Dec 2020
  • Traders return to riskiest aircraft tranches

    The aircraft ABS secondary market experienced a surge in trading activity in November for the first time since the coronavirus outbreak, particularly down the capital structure in the class ‘B’, ‘C’ and equity tranches. Sources say the activity is driven by growing hopes from some funds for a recovery in the sector, met by sellers wanting to clean their books before the year-end.

    • 08 Dec 2020
  • ‘Why we invested in CLOs for the first time this year’

    The Fire and Police Pension Association of Colorado (FPPA) had never made a proper allocation to the CLO market before this year. In November, the board of directors of the pension fund approved a $70m commitment to a CLO debt strategy, despite the turmoil which had engulfed the asset class through the Covid-19 crisis earlier this year. Ben Bronson, director of liquid strategies at the fund, talked to GlobalCapital, about the new allocation.

    • 08 Dec 2020
  • UK ABS deals tweaked to keep STS status

    Issuers are looking to tweak securitizations with UK entities in order to avoid them falling outside the EU’s ‘simple, transparent and standardised’ (STS) criteria once the Brexit transition period ends on December 31.

    • 08 Dec 2020
  • China asset-backed notes: it’s time to stand alone

    Too many Chinese investors focus on the originator more than the asset pool. That undermines one of the crucial purposes of securitization.

    • 08 Dec 2020
  • Loanpal returns to booming solar ABS market

    Residential solar finance company Loanpal is preparing another securitization, which will make 2020 the highest volume year for the issuer. While the solar ABS market should be boosted by the support for sustainability shown by the incoming Biden administration, skeptics say it will take years for political change in the US to fuel a meaningful increase in supply.

    • 07 Dec 2020
  • Rabobank arranges steel securitization

    Ukrainian steel and mining firm Metinvest has launched a receivables securitization programme for its two Italian re-rolling steel mills headquartered in Genoa, Metinvest Trametal and Ferriera Valsider

    • 07 Dec 2020
  • RBI issues €3.3bn real estate synthetic deal

    Raiffeisen Bank International AG (RBI) has securitized a loan portfolio of €3.3bn, retaining the senior and junior tranches in a synthetic securitization but selling the mezz to boost its common equity tier one ratio by about 10bp.

    • 07 Dec 2020
  • BlackRock CLO underlines further tightening

    BlackRock priced the tightest three year reinvestment period CLO since the pandemic hit, selling senior notes at 120bp over three month Libor and tightening the double-B spread from recent prints.

    • 03 Dec 2020
  • Investors say Hertz ABS ‘incredibly positive’ step

    ABS investors drew sighs of relief upon hearing that Hertz is issuing a delayed draw securitization to purchase new rental stock and prepare for new deals in 2021. The $4bn transaction benefits the bondholders as it signals that Hertz is moving towards a full recovery, sources say.

    • 03 Dec 2020
  • Gallic influence to rise in EU's capital markets

    France and Germany will end up as the largest countries in the EU's capital markets after Brexit, including in primary equity and debt markets, according to new research from the think tank New Financial.

    • 03 Dec 2020
  • December window jump-starts securitization secondary

    Euro securitization secondary markets leapt into action as traders see a window of spread tightening in December, crossing their fingers and hoping macro worries have abated for the remainder of the year.

    • 03 Dec 2020
  • Houses, hydrogen and HGVs: priorities for the new UK infra bank

    The UK's national infrastructure bank set to be launched by the government could focus on a range of green investment opportunities, including setting up a scheme like the US's Property Assessed Clean Energy (PACE) model.

    • 03 Dec 2020
  • Wave of neobanks to flood fintech space

    After years of trying to become anything but a bank, fintech lenders are ditching the pure marketplace lending model to become depository institutions themselves. As key players exit the pure online lending space, sources say fintech lenders as a whole could start losing out on traditional avenues of funding, such as the equity market.

    • 02 Dec 2020
  • CLO market hopes new govt keeps Volcker shift

    Changes to the Volcker rule allowing US CLOs to hold bonds as well as loans ought to survive the shift to a new administration, but market participants will be counting the days and hoping the changes, enacted at the beginning of October, aren’t caught up in a Congressional review.

    • 02 Dec 2020
  • Scars from virus to haunt ABS traders long term

    Covid-19 has transformed the secondary market in securitization in various ways — from forcing the market to take trading online to shifting the peak trading hours. Panellists at ABS East this week said the changes enacted during the spring sell-offs are here to stay, and traders have already begun to adapt to the new normal.

    • 02 Dec 2020
  • Consumer ABS delinquencies climbing despite ‘unprecedented’ performance

    Delinquencies in consumer ABS have started to rise off the back of higher unemployment figures, after the asset class has enjoyed unprecedented performance thanks to US government support. The financial health of many deals now rests on the outcome of fiscal stimulus agreements.

    • 02 Dec 2020
  • 2021: year of the credit picker

    If 2020 was a year when sectors and broad virus news drove the market, 2021 will be the year of the credit picker, according to panellists at IMN's ABS East Virtual 2020 event, with individual loan selection more crucial than ever.

    • 02 Dec 2020
  • Newmarket CIO spies $200tr private debt win

    Institutional investors are on the verge of a huge opportunity in private debt, as assets migrate out of the banking system, according to Thierry Adant, who joined Newmarket Capital this week as its chief investment officer.

    • 02 Dec 2020
  • Dutch BTL market booming ahead of stamp duty rise

    The Dutch buy-to-let market is booming ahead of an increased transfer tax on buy-to-let property, softening concerns that the pandemic would lead to a prolonged origination slump in the asset class.

    • 02 Dec 2020
  • TALF soon to expire after CLO disappointment

    The Term Asset Backed Securities Loan Facility (TALF) program will expire at the end of the year, but, despite claiming to target the CLO market, it has proved disappointing, with only Golub Capital issuing a deal which could be bought by the program.

    • 01 Dec 2020
  • Biden administration ‘far more favorable’ to CRT market

    The incoming Biden administration is likely to be more conducive to the development of the credit risk transfer market for the government-sponsored enterprises, according to panelists speaking at ABS East Virtual 2020.

    • 01 Dec 2020
  • Covid crisis set to sort CLO winners from losers

    There will be winners and losers among CLO managers as a result of the Covid crisis, leading to consolidation in the sector, IMN's ABS East Virtual 2020 heard this week. Panellists tried to rethink the post-pandemic CLO landscape.

    • 01 Dec 2020
  • Virus, wildfires to intensify solar ABS supply

    Solar ABS is advancing as a reliable, economical funding source for homeowners as the time they spend at home increases due to Covid-19 and intensifying natural disasters, speakers said in a Tuesday panel at ABS East Virtual 2020.

    • 01 Dec 2020
  • Post-Covid SME loans set to see lower losses

    Small business lenders may see fewer credit losses on their post-Covid SME loans, thanks to a big tightening in underwriting standards in the wake of the pandemic, said investors speaking on a panel at ABS East Virtual 2020.

    • 01 Dec 2020
  • ESG, Libor shift to accelerate despite govt split

    With Joe Biden as president, and a split Congress, the prospect of sweeping progressive change and a comprehensive stimulus package has been dampened. However, the market expects to see substantial progress on the environmental, social and governance (ESG) front and Libor transition, despite the deep divide in government.

    • 01 Dec 2020
  • Alston & Bird hired CLO team from Cadwalader

    Law firm Alston & Bird has hired a three person CLO team from Cadwalader, Wickersham & Taft.

    • 01 Dec 2020
  • Green covered bonds 'zeroed' by EU's green Taxonomy

    Green bond specialists have criticised the buildings section of the European Union’s proposed sustainable finance Taxonomy as impractical, creating unhelpful incentives and excluding most bank financing, including green senior unsecured, RMBS and covered bonds.

    • 01 Dec 2020
  • Axa Bank Belgium and BNPP price first placed synthetic euro-RMBS

    AXA Bank Belgium has become the first issuer to place a euro-denominated synthetic RMBS deal into the market, obtaining extra capital ahead of its sale to Crelan Bank.

    • 01 Dec 2020
  • Geely’s Genius eyes fourth China ABS deal before year-end

    Genius Auto Finance Co, a joint venture between Geely Automobile Holdings and BNP Paribas Personal Finance, is readying a Rmb4.04bn ($614m) Generation 2020-4 retail auto loan securitization. Pricing is expected later this week.

    • 01 Dec 2020