ABS

  • Esoteric knowledge

    Investors drawn to developing non-traditional ABS market

    US esoteric ABS is attracting greater attention as investors seek yield. Several potential growth areas are emerging, with new, innovative collateral types also anticipated.

    Respondents to a recent DBRS survey overwhelmingly favoured esoteric assets over other ABS sectors and identified yield as a primary motivation (SCI 21 March). Dan Castro, president at Robust Advisors, agrees that yield is a key .......

    News Analysis 3 April 2014

  • Charge-offs hit record low

    Fitch's Prime Credit Card Charge-off Index has reached another record low and now stands at 2.89% for the February collection period. The index has declined by 26% year-over-year (YOY) and is 75% below its historic high of 11.52% reached in September 2009.

    Meanwhile, Fitch's Prime Credit Card 60+ Day Delinquency Index increased by 2bp month-on-month (MOM) to 1.23%. This index .......

    News Round-up 2 April 2014

  • Private SLABS poised for stability

    An improving broader economy is leading to fewer college students postponing their monthly loan payments, which should position US private student loan ABS for more stable performance in the coming months, according to Fitch's latest quarterly index on the sector. Private student loan delinquencies ranged between 0.7% and 0.87% during the quarter, while annualised gross defaults remained steady at roughly .......

    News Round-up 2 April 2014

  • MMF CP investments declining

    US money market fund (MMF) investments in commercial paper have declined at a moderate but steady rate over the past year, driven by a reduction in ABCP and non-bank CP, according to Fitch. Relative to a year earlier, outstanding amounts of ABCP as of end-February 2014 were 22% lower.

    The combined share of CP holdings among the top-10 US prime .......

    News Round-up 2 April 2014

  • Punch A downgraded

    S&P has lowered to double-B minus from triple-B and placed on credit watch negative its ratings on Punch Taverns Finance (Punch A) class A1(R) and A2(R) notes. At the same time, the agency has placed on credit watch negative the ratings on Punch A's class M1, M2(N), B1, B2, B3, C(R) and D1 notes, as well as the Punch Taverns .......

    News Round-up 2 April 2014

  • Auto losses inch higher

    US auto prime and subprime annualised losses inched higher in February as asset performance softened somewhat over the past six months, according to Fitch's latest index results for the sector. However, loss rates remain at historically low levels and only marginally off the record low levels recorded in 2012-2013.

    In the prime sector, 60+ day delinquencies were flat in February .......

    News Round-up 1 April 2014

  • ABS supply leaves MBS trailing

    Healthy US ABS secondary market activity yesterday contrasted sharply with the non-agency RMBS and CMBS segments, where bid-list volumes were muted. SCI's PriceABS data shows that supply was dominated by auto, equipment and student loan paper.

    ABS BWIC volume was up markedly from the previous session, totalling around US$340m. By contrast, volumes in non-agency RMBS only reached around .......

    Market Reports 1 April 2014

  • SEC urged to re-propose ABS releases

    SIFMA and the Financial Services Roundtable (FSR) have submitted comments to the US SEC that express significant concerns with its proposed approach to disseminating asset-level and other offering information under Regulation AB 2 (SCI 26 February). The two associations urge the Commission to abandon the "flawed" approach to the disclosure of asset-level information outlined in its Memorandum, which they say .......

    News Round-up 1 April 2014

  • Marking milestones

    Growth ahead for Chinese ABS

    The Chinese securitisation market passed two milestones - in October and February respectively - when foreign banks and non-bank finance companies were permitted to participate in the origination of domestic transactions. These developments coincide with the market-opening reform agenda announced in China's third plenum and lay the foundations for further growth of the country's ABS sector.

    "There is broad recognition .......

    News Analysis 1 April 2014

  • Information portal offered

    Chapman and Cutler has introduced a new tool - dubbed Structured Finance Insights - that is designed to offer quick and easy access to information regarding laws and regulations impacting the structured finance market. Industry participants can visit the portal or subscribe to update feeds to keep up-to-date on the latest regulatory developments affecting a rapidly changing marketplace.

    .......

    News Round-up 31 March 2014

  • SBA methodology revised

    S&P has revised its methodology and assumptions for rating US small business loan-backed securitisations. The agency is updating its loan default assumptions and will now use a 'targeted output' approach for these assumptions under triple-A stress scenarios, while incorporating recent collateral performance observed under moderate economic stress.

    In addition, S&P will use a scoring framework through which it can adjust .......

    News Round-up 31 March 2014

  • Atlas VI notes affirmed

    S&P has affirmed its ratings on the US$125m series 2011-1 class A, US$145m series 2011-1 class B and €50m series 2011-2 class A notes issued by Atlas VI Capital. The move follows the bonds' annual resets of the probability of attachment. In each case, the probability of attachment was reset to a percentage consistent with the transaction documents and the .......

    News Round-up 31 March 2014

  • Tax lien criteria released

    Moody's has published its methodology on rating US tax lien ABS. Its adoption will not result in any rating changes to currently outstanding transactions.

    "Tax lien securitisations are backed by liens on properties with charges that a municipality, township or county impose, such as delinquent property taxes, assessments, sewer rents, sewer surcharges and water rents," says Moody's vp Xiaochao Wang. .......

    News Round-up 31 March 2014

  • Reg AB 2 comment period extended

    The US SEC has extended the re-opened comment period on two releases related to ABS shelf-eligibility under Regulation AB 2 - Asset-Backed Securities and Re-Proposal of Shelf Eligibility Conditions for Asset-Backed Securities (SCI 26 February). The Commission re-opened the comment period to permit interested persons to comment on an approach for the dissemination of potentially sensitive asset-level data. The comment .......

    News Round-up 31 March 2014

  • Solar securitisation expansion expected

    More than six out of 10 solar originators believe securitisation of pooled commercial solar assets will take place over the next 12 months. More than half expect the securitisation of pooled residential solar assets will occur in the same period, according to a Mercatus survey.

    The survey also found that 56% of solar originators say they currently have enough operating .......

    News Round-up 28 March 2014

  • Capital requirement changes proposed

    A number of trade associations have submitted comments to the Basel Committee on revisions to the securitisation framework proposed in its Second Consultative Document. They believe that the proposed capital requirements for securitisation exposures remain much higher than justified by historical loss incidence in most asset classes, by comparison with other methods of finance or in relation to the capital .......

    News Round-up 27 March 2014

  • Japanese ABS issuance jumps

    The low and stable default rate of assets backing Japanese ABS transactions broadly underpins investor confidence and has boosted rated issuance by 68.3% from 1Q13 to 1Q14. This increase in volume is expected to continue as corporate sector borrowings rise due to the 'Abenomics' effect.

    Moody's notes in its latest 'Structured Thinking: Asia Pacific' publication that the expected default rate .......

    News Round-up 26 March 2014

  • Reinsurance pro takes new role

    Hannover Life Reassurance Company of America has appointed Keith Kennerly as structured health and financial solutions vp. He will be based in New York and take responsibility for sourcing and originating new health financing opportunities.

    Kennerly was previously at Aetna where he focused on reinsurance and securitisation, including execution and management of medical loss ratio securitisations. He has also worked .......

    Job Swaps 26 March 2014

  • FFELP SLABS affirmed

    Fitch has affirmed 778 triple-A rated tranches of US FFELP student loan ABS, removed the ratings from rating watch negative and assigned them a stable outlook. The move follows the affirmation of the US sovereign rating and revision of its outlook to stable on 21 March.

    The ratings on the effected tranches are linked to the US sovereign rating, since .......

    News Round-up 25 March 2014

  • A new era in structured trade receivables finance?

    Reed Smith partner Nick Stainthorpe discusses new investors,...

    The increased interest from alternative investors in trade receivables is the result of a number of factors. These include: the high asset prices/low yields being experienced in other asset classes; the wariness of corporates to rely on a single source of supply chain/receivables finance in the post-crisis environment; on-going credit shortages in this sector in countries like Italy, Greece and .......

    Talking Point 25 March 2014

  • Italian ABS framework extended

    The Italian government's December Decree (SCI 19 December 2013) has been converted into law and published in the Italian Official Gazette, with some additional amendments. The decree seeks to address certain issues that have to date remained open under the original formulation of Law 130, the country's securitisation framework.

    As originally adopted, Law 130 expressly provides its benefits to transactions .......

    News Round-up 24 March 2014
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