Vegas attendance jumps as SFIG plots course through shifting market

The number of registered attendees for this year’s SFIG Vegas conference has jumped 10% compared to last year, as the organization looks guide US securitization participants through a rapidly shifting, late cycle market landscape.

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According to SFIG, the number of conference attendees that registered ahead of the event clocks in at 7,550, a 10% jump from 2018 figures. Though the securitization industry has boomed over the past few years, with issuance across many asset classes soaring to post-crisis heights, the surge in attendance is reflective of the growing intricacies within securitization and changes on the horizon in the coming years. Executives at SFIG, as well as market pros speaking ahead of the event say that Libor transition, substantive housing reform and the gyrations of an aging credit cycle are top of the agenda at this year’s event.

Sairah Burki, head of ABS policy for SFIG, highlighted some of the work the group is doing on the Libor transition front, emphasizing that the issue is still very complex, and no one solution will be appropriate in all scenarios when the reference rate is replaced in 2021.

“What we and others in the market are trying to do is make sure that any new Libor deals have language that ensures replacement can happen in way that is as seamless and as understandable as possible,” Burki said. “Libor replacement really does seem to be the big theme [at this year’s event].”

SFIG is leading the Alternative Reference Rates Committee’s (ARRC) securitization working group, and the organization has been taking comments from market participants that Burki says will be presented to the ARRC following this week’s conference.

“The main goal is to make sure deals have the appropriate language, but we can’t assume that any best practices will be adopted across the industry wholesale. Also, parts of the triggers will need to be negotiated deal by deal,” Burki said.

Three panels on Monday and one on Tuesday will give attendees the chance to get a read on Libor replacement and the outlook for new benchmarks such as the secured overnight financing rate (Sofr), which has been pegged as the replacement for dollar Libor.

SFIG is also under new leadership this year, tapping Ginnie Mae president Michael Bright in January to serve as the group’s CEO. Bright’s experience with housing finance and his work with lawmakers should make SFIG well placed to bring the concerns of its members to legislators in the capitol.

In a Q&A with GlobalCapital ahead of the event, Bright said that much of the work that lies ahead for him and for the organization is in educating lawmakers on the uses of securitization and demonstrating that the market is crucial for funding the economy in all phases of the macroeconomic cycle. With a new incoming head of the Federal Housing Finance Agency, and a new proposal from Senator Mike Crapo (R-ID) to reform the government sponsored enterprises (GSEs), housing finance reform is looking as likely as it has ever been in the post-crisis era.  (For the full Q&A with Michael Bright, see page 12.) 

Panels over the four days will cover various aspect of the residential mortgage finance market, including proposed models of GSE reform, the continued resurgence of private label RMBS and the long awaited uniform residential mortgage backed security, the first deliveries of which will come in June.

Apart from Libor replacement and housing finance reform, this year’s event will hit on some similar themes that have cropped up in the post-crisis era. CLOs and leveraged finance are an area of particular focus, as that market is enjoying surging issuance volume but is also faced with unique challenges within the leveraged loan market, which is has proven to be highly susceptible to wider market volatility and credit concerns.

Keynote speeches this year will be delivered from a range of voices, including former chair of the Federal Reserve, Janet Yellen and author of The Big Short, Michael Lewis. Famed reporter Bob Woodward will also give a keynote address, and Arianna Huffington, founder of The Huffington Post, will address the Women in Securitization group Monday afternoon.