ABS

  • Volcker to spur full conduit support

    The Volcker Rule's treatment of ABCP conduits will motivate conduit sponsors to employ full unconditional liquidity coverage and remove an important regulatory risk from the sector, Fitch says. To be exempt from the covered fund definition under the rules, outstanding ABCP must be fully supported and liquidity commitments must be available to fund for the full face amount of all .......

    News Round-up 13 December 2013

  • Stable outlook for German commercial ABS

    The fall in German corporate insolvencies in 2013 to a 14-year low will lead to decreasing default rates in German commercial ABS transactions, according to Fitch, supporting its stable ratings outlook for the sector in 2014. The decrease in corporate insolvencies is consistent with the agency's expectation of a benign economic environment in Germany, which is incorporated into its deal-by-deal .......

    News Round-up 12 December 2013

  • Capital rule changes introduced

    The US Fed has issued a final rule that makes technical changes to its market risk capital rule to align it with the Basel 3 revised capital framework adopted earlier this year. Technical changes to the rule reflect modifications by the OECD regarding country risk classifications.

    The final rule also clarifies criteria for determining whether underlying assets are delinquent for .......

    News Round-up 12 December 2013

  • CLO supply expectations polled

    With a head-count of 180, last week's SCI 7th Annual Seminar saw a 38% increase in attendance on the previous year's conference. Sponsored by Banca IMI and Reed Smith, the seminar focused on credit market dislocation and alternative ways of optimising CLO and ABS returns. Presentations from the event can be downloaded here.

    In a poll conducted after .......

    News Round-up 12 December 2013

  • Negative outlook for WBS

    Fitch says its outlook for UK pub and healthcare whole business securitisations is predominantly negative for 2014. This is driven by a fragile UK economic recovery, public spending austerity and regulatory pressures.

    "Continuing decline in average real income, combined with public spending cuts mainly affecting healthcare funding as well as various regulatory pressures are all holding back the outlook of .......

    News Round-up 11 December 2013

  • Call to limit RWEM disclosure

    DBRS has issued a comment letter regarding the proposal to incorporate existing Rule 17g-7 under the Securities Exchange Act of 1934 into new rule 17g-7(a)(1)(ii)(N). Current Rule 17g-7 requires each NRSRO to include in any report accompanying an ABS credit rating a description of all the representations, warranties and enforcement mechanisms (RWEMs) available to investors, regardless of what those RWEMs .......

    News Round-up 11 December 2013

  • Volcker Rule concerns linger

    The US Fed, the FDIC, the OCC, the CFTC and the SEC have issued final rules to implement section 619 of the Dodd-Frank Act, known as the Volcker Rule. While changes from the original proposal have broadly been welcomed by the securitisation industry, some lingering concerns remain.

    The final rules prohibit insured depository institutions and companies affiliated with insured depository .......

    News 11 December 2013

  • CFPB oversight to spur servicer consolidation?

    The seven largest student loan servicers have the capacity to weather the increased operating costs brought on by Consumer Financial Protection Bureau (CFPB) oversight, according to Fitch. The CFPB oversight applies to non-bank servicers of more than one million accounts.

    The seven largest servicers of federal loan programmes are overseen by the US Department of Education. The CFPB's supervision will .......

    News Round-up 10 December 2013

  • Bondholder communication tool launched

    DealVector has launched InvestorLink, with the aim of streamlining communication in the structured credit markets. Created primarily for issuers, collateral managers and trustees, the service is designed to open a direct communication channel between deal administrators and noteholders.

    Benefits of the service include: accelerated execution of amendments, waivers, consents and other voting events; improved liquidity and transparency; and differentiation for .......

    News Round-up 10 December 2013

  • Credit cards outperform expectations

    US credit card ABS collateral again outperformed market expectations during the October collection period. The Fitch Prime 60+ Day Delinquency and Charge-off indices now stand at a record 1.25% and 2.98% respectively.

    The Fitch Prime 60+ Day Delinquency Index now remains nearly 26.5% below November 2012 levels, while the Fitch Prime Charge-off Index level represents a month-on-month decline of 5% .......

    News Round-up 9 December 2013

  • Minimal Euro default rate underlined

    Only 1.5% by original issuance volume of European structured finance notes outstanding in mid-2007 had defaulted by end-3Q13, according to S&P's latest quarterly transition study. The quarterly transition study analyses cumulative rating transitions and defaults from the beginning of the financial downturn - which is assumed to be mid-2007 - until end 3Q13, aggregating by issuance volume.

    "The 12-month rolling .......

    News Round-up 6 December 2013

  • Euro ABS market still active

    The European ABS and RMBS secondary markets continue to witness strong BWIC supply. SCI's PriceABS data shows a number of covers from yesterday's session, while one trader reports that next week is also expected to be busy.

    "There have been a lot of bid-lists lately and those are mainly coming from hedge funds rather than legacy accounts. What .......

    Market Reports 6 December 2013

  • Even keel for ECP

    The ABCP market has this year seen a rebalancing of issuance towards the ECP sector, which now accounts for roughly 50% of volume. With outstandings expected to increase slightly in 2014, the market appears to have successfully returned to its core function.

    EMEA ABCP volume declined to approximately US$70bn as of September 2013, versus US$524bn in July 2007, according to .......

    News 6 December 2013

  • Greek country ceiling lifted

    Fitch and Moody's have implemented positive rating actions on a number of Greek securitisations. The move follows an uplift in the Greek country ceiling by both agencies.

    Moody's upgraded 16 notes and affirmed six notes in nine Greek transactions, after the agency raised its country ceiling on Greece to B3 from Caa2 and upgraded Greece's sovereign rating to Caa3 from .......

    News Round-up 5 December 2013

  • Broadly stable outlook for US ABS

    Moody's and Fitch have published their expectations for the US ABS market in 2014. While both rating agencies anticipate stable to positive credit card and auto performance, there is some disagreement on student loan ABS.

    The exit of weaker card accounts from trusts during the recession and the improving wider economy will support the credit quality of the collateral backing .......

    News Round-up 5 December 2013

  • Divergent Euro rating outlook

    Fitch's rating outlook for European structured finance (SF) transactions is geographically split. Almost 70% of ratings in the core European countries are predominantly stable, with the remainder related to transactions from the eurozone periphery, which are predominantly negative.

    The negative outlooks for the eurozone periphery reflect a combination of declining asset performance, uncertainty over timing and extent of recoveries, policy .......

    News Round-up 5 December 2013

  • Euro credit quality to remain stable

    The credit quality of European ABS and RMBS transactions will remain stable overall in 2014, says Moody's in its outlook report for the sector. Against the backdrop of stabilising macroeconomic drivers for most countries, affordability across Europe will be sustained by the low interest rate environment, prudent underwriting criteria and regulatory initiatives to boost credit supply.

    While considerable risks remain, .......

    News Round-up 5 December 2013

  • Timeshare delinquencies up on seasonality

    Total US timeshare ABS delinquencies for 3Q13 were 3.14%, up slightly from 3.05% in 2Q13, according to Fitch's latest index results for the sector. The increase reflects the seasonal trend that takes hold in the autumn and winter. Nevertheless, delinquencies are down from 3.28% in 3Q12 and have largely normalised at their historical levels following the dramatic increases of 2008 .......

    News Round-up 4 December 2013

  • Stable outlook for APAC ratings, performance

    Fitch expects both the ratings and asset sector performance of Asia-Pacific (APAC) structured finance (SF) transactions to remain stable over the course of next year. Most public long-term ratings on APAC SF transactions are anticipated to remain at their current level throughout 2014. Of the 10 non-stable outlooks in place at end-3Q13, six were on positive outlook and four were .......

    News Round-up 3 December 2013

  • BRRD to have neutral counterparty impact

    Fitch does not expect its counterparty criteria for structured finance (SF) and covered bonds (CVB) to change if the European Bank Recovery and Resolution Directive (BRRD) is implemented as currently drafted by the European Council. The agency says it considers the proposed directive to have a largely neutral impact upon the seniority of counterparty exposures.

    Fitch believes that eligible rating .......

    News Round-up 3 December 2013

  • Economic improvement to boost esoteric ABS

    The improving US and global economies will generally boost collateral performance of US commercial and esoteric (C&E) ABS in 2014, Moody's says. Real estate values, technological obsolescence and idiosyncratic factors are also expected to drive credit performance across the sector.

    "Collateral performance of securitisations backed by equipment loans and leases will benefit the most from the modestly improving US economy," .......

    News Round-up 3 December 2013
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