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  • Cerberus Capital Management is selling one of the largest ever portfolios of UK mezzanine mortgage bonds on Thursday, following a deterioration in the terms available in the ABS repo market after the huge volatility seen in the Covid crisis. The sale comes the same week as the sale of the last tranche of mortgages by government bad bank UK Asset Resolution, which could also flood the market with mezzanine supply.
  • Janet Oram, head of BlackRock’s European ABS investment group, has criticised the securitization market’s recent reliance on pre-placed transactions and private book building, arguing that it hurts market transparency and price discovery.
  • Non-banks lenders may seek corporate ratings in order to receive support from the UK government after finding it difficult to access financial aid during the Covid crisis, said RMBS players speaking during Global ABS 2020.
  • Davidson Kempner Capital Management has mandated Bank of America for Stratton Mortgage Funding 2020-1, a UK RMBS deal made up of mortgages originated between 2002 and 2008. It was priced on Thursday and its 2.95-year senior notes landed at 90bp over Sonia.
  • The level of Covid-19 payment holidays affecting specialist UK lenders in the UK and fears over the future of the country's economy have failed to dampen demand for their debt among UK RMBS buyers, with the lack of public issuance boosting interest in publicly placed deals.
  • A flurry of UK RMBS deals have come to market in recent days, marking a comeback for the sector as triple-A spreads return to pre-Covid levels.
  • The UK government has launched a review to find ways to boost the country’s fintech sector, a week after the Bank of England told alternative and non-bank lenders they would not receive emergency funding to support them during the pandemic.
  • Some non-bank lenders are unlikely to survive the pandemic crisis, sources say, after the Bank of England told the industry it is not willing to provide emergency liquidity support in the wake of the Covid-19 outbreak. Non-bank institutions are having to grant the same payment relief to customers as high street banks but still have outgoing warehousing costs.
  • Kensington Mortgages is considering redeeming the notes from Kensington Mortgage Securities 2007-1, a legacy deal with the majority of the pool paid down. The issuer is considering a new deal off the back of the redemption.
  • The UK government allowed the growth of the non-bank sector after the global financial crisis, but during the coronavirus pandemic, it has left it to fend for itself.
  • In the wake of the coronavirus pandemic, the speciality lending landscape in Europe could see a shakeout, as financing becomes scarcer and leverage terms tougher, forcing thinly capitalised loan originators to seek extra funds or put themselves up for sale, according to a report from securitization specialists Integer Advisors.
  • Kensington has added features to the new deal in its flagship Finsbury Square RMBS programme to assuage investor concerns about Covid-related payment holidays, with two new reserve funds, a big boost to credit enhancement, and much of the deal placed before announcement. But recovering market appetite means securitization markets could soon revert to broad syndication.