ABS

  • Delivering transparency

    While the financial services industry has to date focused on...

    News that the US SEC postponed a vote in early February regarding the adoption of rules revising the disclosure, reporting and offering process for ABS is disappointing, given the regulator's previously-stated determination to enhance transparency across ABS and MBS instruments. Transformation of this opaque asset class has been high on its agenda since Chairman Mary Shapiro noted the SEC's top .......

    Talking Point 20 March 2014

  • Bundling risk highlighted

    Including services in a lease has become more common in contracts underlying term equipment leasing ABS. However, such 'bundled' contracts introduce performance risk into transactions, according to S&P.

    Bundled contracts can cover a variety of equipment types, but they are most common in office equipment leasing - primarily the bundling of copier maintenance services. For lessees, bundled leasing and service .......

    News Round-up 19 March 2014

  • 'Type A' treatment questioned

    S&P says that the latest changes to the draft Solvency 2 standards will likely do little to prevent many European insurers turning away from securitisation investments, despite representing a positive development compared with the previous proposals. The updated proposal defines certain securitisations as 'Type A' exposures and treats these more favourably than other securitisations termed 'Type B' (SCI passim).

    "We .......

    News Round-up 19 March 2014

  • Spirit upside outlined

    Pubco Spirit has announced strong results for the first half in both its managed and tenanted businesses. The disclosure has strengthened the case for an upgrade of Spirit bonds to investment grade within a 12-month horizon.

    Spirit's managed like-for-like (LFL) sales are up by 6.1% in the eight weeks to 1 March and up by 4.8% in the 28 weeks. .......

    News Round-up 18 March 2014

  • Varied supply in secondary ABS

    US ABS BWIC volume dropped yesterday to a little over US$100m. Much of the supply came from bonds backed by auto collateral, but container, credit card, servicer advance and student loan bonds were out for the bid as well.

    Offering levels across the market were generally unchanged from last week. Aside from the student loan paper, most of the bonds .......

    Market Reports 18 March 2014

  • Asset manager eyes Nordics

    ECM Asset Management has registered its range of credit funds in Sweden and Finland. The firm says it has identified the two countries as markets with significant investor demand for credit funds.

    "Investors in these markets have been investing in equity markets for some time, but have lacked the diversifier of high quality credit funds that ECM now can offer," .......

    Job Swaps 18 March 2014

  • ILS fund minted

    CATCo Investment Management has launched its first dedicated traditional reinsurance investment strategy. Dubbed Aquilo, the fund will be exposed to traditional global reinsurance risk, insurance-linked securities and other financial instruments.

    Managed by ceo Tony Belisle and co-managed by Charlie Vaughan and Rick Montgomerie, Aquilo will launch with initial capital of US$110m, with planned growth for 2015 to US$250m. The fund's .......

    News Round-up 18 March 2014

  • Rating activity becoming 'balanced'

    Global structured finance (SF) rating activity was far more balanced in 2013, according to Fitch, with downgrades declining to pre-crisis levels and upgrades becoming more visible. While downgrades continued to outnumber upgrades by a margin of 1.7 to one, the downgrade rate at 10% declined to its lowest level in six years. Conversely, the upgrade rate rose to 6%, breaking .......

    News Round-up 17 March 2014

  • SF technology to proliferate in EM

    S&P anticipates a proliferation of structured finance technology throughout emerging markets in 2014. The agency believes that expanding domestic markets will continue to dominate the emerging markets landscape within the largest investment grade countries, since cross-border issuances have offered little cost savings for issuers, especially for non-deliverable currencies. It also expects issuers in speculative grade countries to continue seeking cross-border .......

    News Round-up 14 March 2014

  • Portugal's TD plan 'sustainable'

    The government plan to reduce costs and increase revenue can make Portugal's electricity system sustainable and eliminate outstanding tariff deficits (TDs) in the next 10 years, Fitch suggests. Spain's ability to eliminate TDs remains considerably less certain, however.

    Portugal's plan includes revising special tariffs on new renewable contracts and phasing out end-user regulated electricity tariffs by end-2015. Fitch expects these .......

    News Round-up 13 March 2014

  • US ABS ratings stability underlined

    S&P reports that the creditworthiness of US ABS generally remained stable in 2013. Specifically, 99.8% of the transactions rated triple-A at the start of year had the same rating at the end of the year or were paid off in full, while none defaulted.

    From 1983 through 2013, 82.8% of US ABS originally rated triple-A kept that rating or were .......

    News Round-up 11 March 2014

  • Cards support US ABS secondary supply

    US ABS bid-list supply during yesterday's session was mainly accounted for by credit card names. BWIC volumes reached almost US$150m with auto, aircraft and student loans paper also circulating.

    SCI's PriceABS data captured a varied mix of credit card tranches out for the bid in yesterday's session. Among them was the BOIT 2004-C2 C2 tranche, which .......

    Market Reports 11 March 2014

  • Credit card maturities to decline

    US credit card ABS maturities will decline sharply in the next few years, says Fitch. The rating agency projects maturities to top US$41bn in 2014 before falling to just over US$21bn in 2016.

    Historically low rates during the credit crisis led to many credit card issuers pulling back on securitisation, but levels may soon rise again. Overall issuance this year .......

    News Round-up 11 March 2014

  • 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
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