ABS

  • Negative interest rates hit ETD deals

    Legacy securitisations of Spanish electricity tariff deficit (ETD) debt are effectively charging interest to noteholders in a negative interest rate environment, Moody's reports. In ETD securitisations with floating interest rate notes, the issuer chooses to deduct the interest payment from the value of the outstanding amount of the notes, while maintaining the pass-through payments to noteholders. As a result, the .......

    News Round-up 13 July 2016

  • Markit merger completed

    IHS and Markit have completed their merger to form IHS Markit (SCI passim). The firm begins trading today (13 July) on the Nasdaq Global Select Market under the trading symbol 'INFO'.

    The new 11-member board of directors for IHS Markit consists of: Dinyar Devitre, Ruann Ernst, William Ford, Balakrishnan Iyer, Robert Kelly, Deborah McWhinney, Jean-Paul Montupet, Richard Roedel, James Rosenthal, .......

    Job Swaps 13 July 2016

  • Next steps

    Madden ruling creates landscape of uncertainty

    On 27 June the US Supreme Court decided not to hear the Madden vs Midland case, resulting in a continued lack of clarity surrounding national and state usury rates. The move has led to marketplace lending platforms taking steps to adapt to the ruling, as well as other participants questioning the reasoning behind the case and the effect it will .......

    News Analysis 12 July 2016

  • Card ABS downgrades expected

    As much as 25% of S&P-rated European credit card ABS ratings could be downgraded following the agency's methodology changes to rating the asset class. The rating approach, which became effective from yesterday, has been revised to incorporate S&P's same global methodology for assessing the credit quality of securitised consumer receivables.

    S&P rates approximately 50 European credit card ABS transactions, but no upgrades are .......

    News Round-up 12 July 2016

  • STC risk weights reduced

    The Basel Committee has scaled down the risk weights for 'simple, transparent and comparable' (STC) securitisations and reduced the risk-weight floor for senior exposures from 15% to 10%. The move had largely been expected and, in general, is viewed as catching up with European proposals for the STS securitisation framework.

    "For this topic, the European Commission decided not to wait .......

    News 12 July 2016

  • Euro secondary strengthens

    Supported by the wider market rally the European securitisation secondary market is strengthening and spreads are edging in.

    This week has again started with light flows, but many sectors are now back to around pre-Brexit levels as sentiment continues to improve in line with seeming greater political/central bank certainty. Once more, CLOs are leading the way in terms of both .......

    SCIWire 12 July 2016

  • MUFG poaches ABS head

    Mitsubishi UFJ Securities has brought in Haan Ti as head of ABS for Australia and New Zealand. He joins from Westpac Institutional Bank, where he was director in structured finance and syndicate.

    Ti has also held senior roles at HSBC and Rinker Holdings. His past duties include origination of ABS and RMBS term transactions, as well as origination of structured .......

    Job Swaps 11 July 2016

  • Energy efficiency sale agreed

    Susi Partners, managing authority of the SUSI Energy Efficiency Fund, is set to acquire €1.2m of loans related to lighting energy efficiency assets installed by TerniEnergia. These private contracts will be sold to an SPV regulated under Italian law and back a new Susi Partners receivables securitisation.

    TerniEnergia operates as an energy service company (ESCO) through the 'Hub' platform, a .......

    News Round-up 11 July 2016

  • Brexit ratings outlook 'unchanged'

    Fitch has reassured the market that no more UK structured finance rating actions are expected in the near term following the country's vote to leave the EU. However, terms of the exit could present tail risks, including mortgages and leveraged loans experiencing longer-term underperformance.

    Fitch says that the elevation in risk premiums following the UK vote to leave the EU will weaken private .......

    News Round-up 8 July 2016

  • Global issuance trends diverging

    S&P reports that that there is a clear divide in recent structured finance issuance trends, with the US, Europe and Australia all seeing recent declines and countries such as Brazil, Argentina, China and Canada witnessing increases. The agency attributes declines in the former group to both broader volatility and a host of recent regulations governing capital charges and liquidity ratios.

    Amid strong underlying .......

    News Round-up 8 July 2016

  • SFIG warns against tax rules

    The Structured Finance Industry Group (SFIG) has sent a letter to the US Treasury Department outlining its concerns that new income tax regulations could disrupt the securitisation market. The group's Tax Policy Committee describes the regulation as "overly broad" and says it could lead to potentially "adverse, market-chilling effects".

    The regulations are proposed under Section 385 of the 1986 Internal .......

    News Round-up 8 July 2016

  • Discount note cat bond emerges

    Swiss Re Capital Markets has placed a US$100m transaction in the ILS market, the first catastrophe bond sold at a discount pursuant to Rule 144A since 2009. Laetere Re was issued on behalf of United Property & Casualty Insurance Company (UPC), Family Security Insurance and Interboro Insurance, providing reinsurance cover on named storms and earthquakes affecting certain US coastal states.

    The .......

    News Round-up 8 July 2016

  • Cat bond activity dips

    Insurers and reinsurers' overall cat bond sponsorship approached US$3bn for the first half of this year, according to a report by Property Claims Service (PCS). This represents the second annual first-half issuance decline in a row.

    By capital raised, new issuance activity fell 26% year-over-year, with the number of transactions completed down by 12.5%. Average transaction size fell 21.5% to just .......

    News Round-up 7 July 2016

  • Italy SME weakening noted

    The Italian ABS SME securitisation market is being increasingly dominated by originators with both lower credit and asset quality, says Moody's. However, the outlook for the sector is stable.

    Originator banks with an investment grade credit rating accounted for 13% by number of Italian SME transactions rated by Moody's in 2014 and 2015. They had accounted for 40% in 2011-2013. .......

    News Round-up 7 July 2016

  • PREPA compromise confirmed

    A number of parties within PREPA's restructuring support agreement (RSA) recently agreed to purchase new interest-bearing bonds from the utility, enabling it to fund outstanding principal and interest payments that were due to its bondholders on 1 July. The agreement also includes an extension to the RSA, which pushes it out to 15 December.

    Among the buyers of the bonds was Assured Guaranty, .......

    News Round-up 6 July 2016

  • Secondary markets advisors sought

    ESMA has published a call for candidates to form a consultative working group (CWG) for its secondary markets standing committee (SMSC). The two-year term of the existing CWG will expire shortly.

    The CWG mainly advises and assists the SMSC on technical standards to be submitted to the European Commission and on guidelines, Q&As and other guidance in relation to relevant .......

    Job Swaps 5 July 2016

  • Big appetite

    ABS investors hungry for more deals

    While political developments on the other side of the Atlantic may have increased risk, US ABS still provides ample opportunities to invest. Gross ABS issuance is up to almost US$90bn for the year so far, as investor demand remains high.

    ABS spread widening in the immediate aftermath of the UK's EU referendum result was only modest and Wells Fargo structured .......

    News Analysis 5 July 2016

  • International expansion eyed

    Tikehau Capital has completed two share capital increases of €510m and signed up two new institutional investors as shareholders of its holding company. These transactions will provide the group with additional resources to develop its global strategy and accelerate its international expansion.

    Through a €94m capital increase, Tikehau Capital Advisors (TCA) has gained new shareholders Temasek and FFP (the listed .......

    Job Swaps 4 July 2016

  • UK sovereign-linked deals downgraded

    Fitch has downgraded 18 tranches, and placed another two on rating watch negative, from six transactions which are credit-linked or have significant direct credit exposure to the UK sovereign. The rating actions follow the downgrade of the country's long-term issuer default rating to double-A earlier this week.

    Annington Finance No.1 and Sceptre Funding No.1 rely entirely on rental payments from .......

    News Round-up 1 July 2016

  • ESMA reviews harmonisation issues

    ESMA has released a peer review which pinpoints areas for greater EU harmonisation among national securities regulators. The review notes that regulators are sufficiently resourced and have approved prospectuses within legal deadlines, but suggests further convergences would be beneficial.

    The review, covered between January 2013 and December 2014, found that prospectuses have been seen as often complex and difficult to .......

    News Round-up 1 July 2016

  • LatAm expansion inked

    DBRS has opened a new office in Mexico City as part of its ongoing global expansion program. The agency has named Salvador Cruz svp, country manager and head of business development for Mexico, and Luis Alvarez vp, global compliance officer and regulatory counsel for Mexico.

    Cruz began working at DBRS in early January 2016 and reports to Sean O'Connor, md, .......

    Job Swaps 1 July 2016
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