ABS

  • 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

  • Peripheral country caps lifted

    Fitch has taken positive rating action on 150 tranches of 113 structured finance transactions that are capped relative to the sovereign ratings of Ireland, Portugal and Spain. The move follows the revision of the caps on structured finance (SF) ratings to align them with the country ceilings of those countries, six notches above the respective sovereign issuer default ratings (IDR). .......

    News Round-up 16 April 2014

  • US ABS activity accelerates

    SCI's PriceABS data shows a mix of auto and railcar bonds circulating on bid-lists yesterday as US ABS secondary market activity picked up. BWIC volume for the session reached around US$125m.

    Among the auto tranches out for the bid was AMCAR 2013-3 D, which was covered at 103. That was the first time the tranche had .......

    Market Reports 16 April 2014

  • Large exposure controls finalised

    The Basel Committee has published a final standard that sets out a supervisory framework for measuring and controlling large exposures, which will take effect from 1 January 2019. The framework is designed to protect banks from significant losses caused by the sudden default of an individual counterparty or a group of connected counterparties.

    In cases where the bank's counterparty is .......

    News Round-up 16 April 2014

  • Punch proposes securitisation waivers

    Restructuring negotiations for Punch's securitisations continue and both  have requested DSCR waivers. Punch A is non-compliant with its DSCR covenant, while Punch B will be non-compliant at its next testing date.

    Punch's results for the first half of the 2014 financial year show continued progress in its core portfolio. Like-for-like net income growth is up 1.4% as the group has .......

    News 15 April 2014

  • SLM split scheduled

    Sallie Mae's board has formally approved the separation of its loan servicing business line from its consumer banking business. The loan servicing entity will be called Navient, while the consumer banking business will retain the Sallie Mae brand.

    The split is scheduled for 30 April, with the separation achieved via a dividend distribution to Sallie Mae shareholders on 22 April. .......

    News Round-up 15 April 2014

  • Decisive action

    Katie Skeels, associate at Hogan Lovells, examines current t...

    Hogan Lovells recently published a report - entitled 'Global Currents - Trends in Complex Cross-Border Disputes 2014' - which surveys current trends in cross-border disputes. The results suggest that senior executives and in-house counsel are proactively developing their dispute management strategies, including for securitisations, to suit the increasingly global business landscape.

    In an increasingly globalised economy, there are significant benefits .......

    Talking Point 15 April 2014

  • NSFR framework critiqued

    The Basel Committee's amended proposal for a minimum standard ratio for bank funding would introduce globally harmonised requirements that would potentially reduce funding mismatches, according to S&P. The agency adds, however, that the proposals contain some potential inconsistencies and gaps - and that the planned timeline for their implementation in January 2018 is slow.

    These observations form part of S&P's .......

    News Round-up 14 April 2014
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