ABS

  • Tiering forecast for water WBS

    Fast-tracking of business plans among certain UK water companies is expected to drive tightening across their securitised bonds. The move follows the release of Ofwat's guidance on allowed weighted-average cost of capital (WACC) for the 2015-2020 regulatory period (PR14) (SCI 10 February).

    Allowed returns are likely to fall to 3.85% for PR14, versus 5.1% for the previous regulatory period (PR09). .......

    News 10 March 2014

  • PAYE expansion to boost FFELP prepays

    President Obama's proposed expansion of the existing Pay as You Earn (PAYE) plan for student loan borrowers could decrease default risk and increase prepayments in FFELP ABS portfolios, Fitch says.

    The PAYE plan only applies to borrowers from the direct loan programme, but FFELP borrowers could benefit by consolidating their FFELP loans into direct consolidation loans. Fitch believes that the .......

    News Round-up 10 March 2014

  • From strength-to-strength

    Peer-to-peer securitisation has room to grow

    The peer-to-peer securitisation market may be in its infancy, but a handful of deals have already been completed. While the deals so far have been small by securitisation standards, the sector could become a "multi-billion" dollar market.

    "We have only recently started to see deals coming to market, but there is a lot of optimism that there is room for .......

    News Analysis 7 March 2014

  • Lower losses seen on CDQ, DP loans

    Italian Cessione del Quinto (CDQ) and Delegazione di Pagamento (DP) consumer loan products pose risks because of their greater complexity, but provide enhanced security and generally imply lower losses than standard consumer loans, Moody's says. These products saw total issuance of €4.5bn in 2013, around 50% of which was concentrated with the top four players in the market.

    "CDQ and .......

    News Round-up 6 March 2014

  • ARS pricing service offered

    SIX Financial Information has teamed up with Pluris Valuation Advisors to help clients to value auction rate securities. Pluris has an extensive database covering thousands of recent transactions and a close relationship with SecondMarket, which is currently the only active auction rate trading venue.

    The Pluris auction rate pricing available through SIX covers municipal, student loan and preferred securities. It .......

    Job Swaps 5 March 2014

  • RFC issued on TD approach

    Fitch has published a criteria exposure draft for rating Portuguese and Spanish electricity tariff deficit (TD) securitisations. The agency believes that the ratings of TD securitisations cannot be more than three notches higher than the issuer default rating (IDR) of the relevant sovereign, mainly because its central expectation is that macroeconomic trends and regulatory policies have a direct impact on .......

    News Round-up 4 March 2014

  • From the sidelines?

    Sidecars, SACs and private cat bonds gaining ground

    The dominance of catastrophe bonds in the ILS sector could be challenged by the growth of sidecars. With segregated accounts companies (SACs) also rising in prominence and private deals becoming more common, the nature of the market is changing.

    Last year was the busiest since 2007 for the ILS market, with Willis Capital Markets & Advisory estimating that more than .......

    News Analysis 4 March 2014

  • Korean credit card quality to deteriorate

    The credit quality of receivables backing Korean credit card ABS is expected to deteriorate as a result of the recent data breach that affected millions of cardholders. The disappearance of affected cardholders from securitisation pools will weaken the overall credit quality of receivables and the principal payment rate (PPR) in credit card ABS, Moody's says.

    Three credit card companies were .......

    News Round-up 28 February 2014

  • Lifting of Aussie import tariffs 'credit negative'

    Australia's Productivity Commission published a position paper on 31 January, describing the country's auto import restrictions and tariffs as redundant. Moody's says in its latest 'Structured Thinking: Asia Pacific' publication that the lifting of the restrictions would be credit negative for Australian auto loan and operating lease ABS because they would lower the price of cars, thereby affecting ABS pools .......

    News Round-up 28 February 2014

  • PRI to boost EM issuance

    Political risk insurance (PRI) for capital markets has re-emerged, with a broader scope for coverage to adapt to the changing needs of emerging markets finance, Fitch says. These newer products normally relate to a sovereign guarantee or obligation and therefore do not address private sector companies in the absence of a sovereign support mechanism.

    "New PRI products that cover not .......

    News Round-up 27 February 2014

  • Stable performance expected for DFP ABS

    Fitch expects dealer floorplan (DFP) ABS assets and ratings to be stable this year, due in part to a robust vehicle sales forecast. The agency's US light vehicle sales forecast for 2014 is 16 million units, which would provide ample support for US dealer revenues and profit levels.

    Dealers also expect to benefit from healthy demand for both new and .......

    News Round-up 27 February 2014

  • Solar investment gaining traction

    Investor interest in commercial solar projects has more than doubled in the last 12 months, according to Mercatus. A year-end analysis of commercial solar project investment and development trends undertaken by the firm reveals that exploration - and investment dollars - for solar projects is on the rise.

    Mercatus reports growth of more than 200% in the number of projects .......

    News Round-up 26 February 2014

  • Lebanese receivables ABS closed

    Bemo Securitisation has closed DHC Healthcare Fund, the first revolving trade receivables securitisation in the Lebanese healthcare sector. The transaction is backed by a US$14m diversified portfolio of trade receivables provided by Dima Healthcare to its hospital, pharmacy and clinic clients.

    The fund has been established under Lebanese Law 705/2005, has a 4.5-year maturity and a three-year revolving period. The .......

    News Round-up 26 February 2014

  • Softer performance seen in autos

    Overall asset performance in both the prime and subprime auto loan ABS sectors was softer in January, as prime annualised losses rose by 6.8% on a monthly basis and subprime losses crept up by 1.3%, according to Fitch. But the late winter months are seasonally strong as consumers pay down debt levels, so the agency expects asset performance to improve .......

    News Round-up 26 February 2014

  • Seasonal trends lift timeshare delinquencies

    US timeshare ABS delinquencies increased moderately this past quarter due to seasonal trends, though year-over-year declines continue, according to Fitch's latest index results for the sector. Total delinquencies for 4Q13 stood at 3.38%, up slightly from 3.14% in 3Q13.

    However, 4Q13 marks the sixth consecutive quarter of year-over-year improvement. Delinquencies for 4Q12 were 3.55% and have largely normalised at their .......

    News Round-up 26 February 2014

  • MMF rules delayed

    The decision by the European Parliament's Economic and Monetary Affairs Committee to postpone agreement on draft rules to regulate money market funds (MMFs) last week leaves the scope of possible investment restrictions on ABCP unclear, Fitch says. These restrictions may prompt significant asset reallocation for some MMFs, depending on the scope of the regulation.

    Euro- and sterling-denominated constant net asset .......

    News Round-up 26 February 2014

  • RV approach updated

    Moody's has updated its methodology for rating EMEA auto lease ABS exposed to residual value (RV) risk. The agency has expanded the methodology previously applicable to rating UK RV ABS transactions to other EMEA regions.

    In particular, Moody's has confirmed that haircut levels developed for the UK are broadly applicable to other European markets and clarified its approach in relation .......

    News Round-up 26 February 2014

  • Spanish sovereign ceiling lifted

    Moody's has raised the maximum achievable rating for Spanish structured finance transactions to A1 from A3, following the upgrade of Spain's government bond rating to Baa2 from Baa3 and its local and foreign currency bond and deposit ceilings to A1 from A3. The move reflects improvements in institutional strength and reduced susceptibility to event risk, the agency says.

    Moody's is .......

    News Round-up 26 February 2014

  • RFC issued on privacy approach

    The US SEC has reopened for comment its proposals for ABS shelf-eligibility under Regulation AB 2. Specifically, the Commission is seeking comments on an approach for the dissemination of potentially sensitive asset-level data to address privacy issues.

    The relevant proposals are: Asset-Backed Securities, Securities Act Release No. 33-9117 (Apr. 7, 2010), 75 FR 23328; and Re-Proposal of Shelf Eligibility Conditions .......

    News Round-up 26 February 2014

  • Ratings vet takes top credit role

    Morningstar has appointed Calvin Wong as chief credit officer. He will be based in New York and report to president Vickie Tillman.

    Wong will take responsibility for enhancing the internal control structured for ratings, supporting credit rating model review processes and overseeing the development of rating criteria. He has in-depth knowledge of ABS and RMBS and was most recently practice .......

    Job Swaps 26 February 2014

  • SPVs implementing FATCA remedies

    SPVs incorporated outside the US are likely to take the necessary steps required to ensure that they do not incur losses related to FATCA, Moody's suggests. In cases where SPVs do not take remedial action, the agency says it will assess the negative impact of such losses on the ratings of the relevant notes.

    FATCA will impose a withholding tax .......

    News Round-up 25 February 2014
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