ABS

  • TRACE expansion delayed

    FINRA is said to be delaying the implementation of ABS price dissemination, with technological changes required for the implementation believed to require additional time. The authority will announce a revised implementation date before 22 August, postponing it from the previous announcement date of 25 April. JPMorgan ABS strategists note that effective dates are typically set at least six months after .......

    News Round-up 30 April 2014

  • Charge-offs hit new lows

    A steady decline in credit card delinquencies coupled with lower bankruptcy rates pushed US credit card ABS charge-offs to new lows in the first quarter, according to Fitch's latest quarterly index for the sector. Average charge-offs fell to 3% for 1Q14 from 3.04% in 4Q13, marking 15 consecutive quarters of improvement, with the level now approximately 25% lower year-over-year.

    "Consumers .......

    News Round-up 29 April 2014

  • 'Credit card' ABS first in China

    A deal generally being seen as the first credit card ABS in China came out last month, although Moody's notes in its latest 'Structured Thinking: Asia Pacific' publication that the transaction is essentially an auto loan ABS. The deal was sponsored by China Merchants Bank.

    CMB's credit card operation originated the receivables, but there are a couple of very different .......

    News Round-up 29 April 2014

  • RFC issued on credit card ABS

    Moody's is requesting feedback from market participants on proposed changes to its approach to rating securitisations backed by credit card receivables and revolving consumer loans across all jurisdictions. The proposal modifies assumptions about credit card portfolio performance under stress and more explicitly incorporates the credit quality of the sponsor into the agency's rating analysis.

    The proposed changes will address key .......

    News Round-up 29 April 2014

  • APRA to simplify securitisation approach

    The Australian Prudential Regulation Authority (APRA) has released for consultation a discussion paper on its proposals to simplify the prudential framework for securitisation for authorised deposit-taking institutions (ADIs). The authority says that the prudential framework for securitisation needs to be "clear and simple for stakeholders to understand".

    APRA's proposals take into account the lessons learned from the financial crisis and .......

    News Round-up 29 April 2014

  • US ABS supply inches higher

    US ABS BWIC volume was subdued yesterday, just creeping above US$50m. SCI's PriceABS data shows supply dominated by auto ABS paper, although a mix of other collateral types also appeared on bid-lists.

    Most of the action was in the auto space, where the AESOP 2012-3A A tranche was talked at 100 handle and covered at 99.34. .......

    Market Reports 29 April 2014

  • Euro performance remains strong

    The credit performance of European structured finance over the financial downturn remains strong. Only 1.5% of notes outstanding in mid-2007 defaulted by end-2013, according to S&P's latest quarterly transition study.

    Consumer transactions have outperformed corporate transactions by a wide margin, with a cumulative default rate since mid-2007 of only 0.05% and a cumulative downgrade rate of 29.1%, compared with 5.01% .......

    News Round-up 28 April 2014

  • PAYE growth 'ABS neutral'

    The rapid growth of the Pay as You Earn (PAYE) plan to cap student loan obligations is neutral for US student loan ABS, says Fitch. The rating agency is uncertain of the chances of the scheme being expanded.

    The plan currently only affects federal direct loan borrowers - of which there are now 1,300,000 owing a total of US$72bn - .......

    News Round-up 25 April 2014

  • CSA urged to revisit ABCP proposals

    SFIG's Latin America and Canada Committee has submitted a comment letter to the Canadian Securities Administrators (CSA) in response to its request for comments on the proposed amendments to 'National Instrument 45-106 Prospectus and Registration Exemptions'. The proposed amendments would require short-term securitised products to comply with a number of new conditions and disclosure requirements, including extensive disclosure of ABCP .......

    News Round-up 24 April 2014

  • Student loan business acquired

    CIT Group has entered into three separate loan sale agreements with Nelnet, through which Nelnet will acquire the firm's student lending business. Pursuant to the agreements, CIT will sell to Nelnet certain subsidiaries that hold its residual interests in securitisation trusts with approximately US$2.6bn of student loans and the related student loan asset-backed debt. A further US$950m of student loan .......

    News Round-up 23 April 2014

  • SME platform debuts

    BNP Paribas, BPCE, Crédit Agricole, HSBC and SG have established Euro Secured Notes Issuer (ESNI). Billed as a new form of securitisation, the programme is secured by bank loans to SMEs meeting the eligibility criteria for Eurosystem refinancing operations.

    ESNI is open to all European banks and issued its first Euro Secured Notes (ESN) on 11 April for an outstanding .......

    News Round-up 23 April 2014

  • Solar securitisation standards adopted

    Mercatus has formally adopted the solar access to public capital (SAPC) working group standard contract documents for both residential and commercial solar. The investment platform has been heavily involved in SAPC's efforts to define risk and credit parameters.

    The SAPC working group was convened last year to enable securitisation of solar PV assets and associated cashflows (SCI 20 March 2013). .......

    News Round-up 22 April 2014

  • Criteria tweak for FFELP SLABS

    Fitch has published an exposure draft with respect to its criteria for rating US FFELP student loan ABS. The main proposal upon which feedback is sought is the appropriation of standard default rate assumptions.

    The exposure draft discloses the standard default rate assumptions Fitch uses for cashflow modelling when issuer-specific data is not available. These assumptions are based on 22 .......

    News Round-up 22 April 2014

  • Punch notes downgraded on uncertainty

    Moody's has downgraded notes from both Punch Taverns' Punch A and Punch B securitisations. The downgrades are a result of the delay in the restructuring of the securitisations and the uncertainty accompanying it.

    The noteholders and creditors have been asked to agree to a DSCR covenant waiver (SCI 15 April). The waiver would give the issuer and transaction parties more .......

    News Round-up 22 April 2014

  • Auto subprime lenders 'more cautious'

    US subprime auto lenders have become more cautious in granting loans to increasingly risky borrowers, says Moody's. However, no major slowdown in subprime lending is anticipated.

    Borrower credit scores improved for used auto loans in 4Q13 for the first year-over-year improvement since 2010. There was also slower growth in the share of subprime lending provided by banks, credit unions and .......

    News Round-up 22 April 2014

  • Autos boost ABS secondary supply

    An increase in US ABS bid-list supply yesterday was largely driven by auto ABS paper. BWIC volume reached around US$70m as equipment and whole business tranches also circulated.

    SCI's PriceABS data recorded several covers from the session as well as a range of price talk. Among those tranches was the FORDO 2013-B A3 tranche, which was .......

    Market Reports 22 April 2014

  • Diesel prices hit Indian ABS

    Fitch expects the performance of Indian ABS transactions backed by commercial vehicle (CV) loans to deteriorate further in the near term, after weakening significantly over 4Q13 and 1Q14. The deterioration has been affected by the general slowdown in the Indian economy and the significant hike in diesel prices, which have squeezed margins and undermined the debt-servicing capacity of CV loan .......

    News Round-up 17 April 2014

  • Fundamentals index remains stable

    The Fitch Fundamentals Index (FFI) remained stable for 1Q14 on trends including a bottoming-out of consumer credit delinquencies, a decline in the CDS outlook and an increase in corporate earnings and banking scores that are unlikely to be sustained in the longer term. Quarter-over-quarter, positive FFI component scores outweighed the negative by four to one, with five remaining at neutral.

    News Round-up 16 April 2014

  • Royal Decree impact examined

    DBRS says that changes to Spain's insolvency law, introduced last month (SCI 18 March), will not immediately impact its assumptions regarding defaults and recovery rates in the jurisdiction. However, the agency notes that the Royal Decree 4/2014 raises several questions as to how structured finance transactions will be impacted.

    In particular, DBRS points to a number of questions raised by .......

    News Round-up 16 April 2014

  • Stable rating outlooks for APAC

    Fitch reports that over 97% of its Asia-Pacific structured finance rating actions in 1Q14 were affirmations, with eight upgrades and two downgrades accounting for the remaining rating actions. Of the 364 affirmations, 347 were from Australia and New Zealand.

    Australia also contributed all eight of the upgrades - to auto loan ABS, prime RMBS and non-conforming RMBS bonds - during .......

    News Round-up 16 April 2014

  • EBA work plan expanded

    The EBA has released an addendum to its work plan for 2014, following a series of calls for advice from the European Commission. The additional work will mostly consist of technical advice on a number of topics related to provisions in the CRR/CRD, informing the Commission in the preparation of reports to the European Parliament and the Council.

    The technical .......

    News Round-up 16 April 2014
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