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Anthropic has begun to restore access to its most powerful AI model, after the US government lifted export controls.
When the ban came in, GlobalCapital argued that it proves the need for Europe’s digital infrastructure to catch up with the US. Reinstated or not, the possibility of export controls proves that the US is in charge when it comes to AI.
If Europe wants to change that capital markets could part of the answer, so it is heartening that a first fibre securitization seems to be drawing closer.
Delegates at Global ABS last month were enthusiastic about the possibility, though challenges remain.
Finding suitable assets is a big one. Securitization issuers will likely want funding 30 years into the future and that means getting rating agencies and investors comfortable that they will still have customers at that point.
The key is having a stabilised network with low churn and there are still not lots of those around.
As well as covering that, George Smith also wrote about Balbec’s acquisition of UK bridging lender Funding 365. GlobalCapital wrote last year that fund managers wanting a proprietary asset flow could start making deals to buy lenders. This appears to be an example.
Bain’s bane
Meanwhile, the European CLO market’s favourite brag is no more. For the first time in the CLO 2.0 era, which began after the financial crisis, a debt tranche has failed to repay its original principal balance.
The tranche in question is the class ‘F’ note of Bain Capital Euro CLO 2018-1. Thomas Hopkins argues it is a warning for investors in CLO junior mezz - they are well paid, but for a reason.
At the same time, the structure has done its job. Investors from double-Bs up have been protected by the subordination in place. A single-B rating means investing carries risk. Some losses on such tranches at some point were inevitable.
