ABS
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M&G finances tech rental firm Grover via ABS deal
Sector developments and company hires
M&G has announced entry into a funding deal with the consumer-tech subscription platform, Grover. Proceeds from the €270m ABS transaction will be used to grow Grover’s product inventory and expand its presence across European markets. Subscribers to Grover’s platform receive access to over 5,000 tech appliances, which are available to rent on a flexible monthly basis. Grover’s services have seen .......
Market Moves 30 September 2022
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Primary stutters as secondary swamped
European ABS/MBS market update
In what has been a week of political and financial turmoil since last Friday’s UK mini-budget, two deals were pulled, though two more made it over the line. At the same time, the secondary market was flooded with BWICs, driving some hefty volumes.
“This week has been all the about the secondary market,” notes one European ABS/MBS trader. .......
News 30 September 2022
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SCI In Conversation podcast is now live!
We discuss the hottest topics in securitisation today...
In this inaugural episode of the SCI In Conversation podcast, Angela Sharda chats to KBRA European research head Gordon Kerr about a European securitisation investor survey the rating agency undertook in June and the implications of the findings today. We also discuss a couple of new SCI Premium Content articles, one of which tracks the evolution of the STS synthetic .......
News 30 September 2022
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Bright spots
IRA set to boost solar ABS origination
The US solar ABS market is poised for growth, following the passage of the Inflation Reduction Act (IRA) last month. In particular, the extension and expansion of the investment tax credit (ITC) is set to encourage consumer engagement with solar panels.
“Origination continues to be strong and we will continue to see ABS transactions for the rest of .......
News Analysis 28 September 2022
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Split opinion
Recession considerations discussed
The jury is still out on the likely impact of next year’s forecast recession on the securitisation market. However, panellists at S&P’s European Securitisation Conference earlier this month did concur that the situation is likely to get worse for the sector before it gets better.
While the forecast for the European securitisation market appears somewhat bleak, the majority .......
News Analysis 27 September 2022
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'Specialist-squared' solution?
Renewable energy SRT challenges addressed
Banks are expected to substantially grow their lending in the renewable energy sector, driven by ambitious net-zero programmes and government efforts to meet climate targets, heightened further by recent geopolitical tensions. Risk-sharing transactions can play an important role in allowing banks to manage both regulatory capital and risk limit constraints as lending books grow, while retaining the assets on .......
News Analysis 26 September 2022
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Legitimate questions
STS synthetics adoption discussed
The adoption of STS synthetic securitisation has helped legitimise the capital relief trades market. However, this Premium Content article outlines how the EBA’s most recent consultations could prove challenging.
STS synthetic securitisation issuance has soared since the execution of the first transaction in June 2021, adding momentum to this year’s capital relief trade deal flow, further legitimising ......
News Analysis 22 September 2022Premium Content
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Branching out
Thomas Majewski, managing partner and founder of Eagle Point...
Q: Eagle Point recently announced its expansion into the ABS, MBS and SRT markets, which will be led by Karan Chabba as head of ABS, MBS, SRT and speciality finance (SCI 19 July). What were the motivations behind branching out into these markets?
The Structured Credit Interview 15 September 2022
A: In terms of relative interest, the order we are looking at these is SRT, ABS .......
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Controversial Revlon decision reversed
Sector developments and company hires
Controversial Revlon decision reversed
Market Moves 14 September 2022
The US Circuit Court for the Second Circuit last week reversed the controversial decision by the District Court for the Southern District of New York (SDNY) that permitted lenders to retain the mistaken payment made by Citi as administrative agent for a credit agreement with Revlon (SCI 20 August 2020). The SDNY decision upended decades .......
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SME funding partnership inked
Sector developments and company hires
SME funding partnership inked
SME Capital and JPMorgan have agreed a new funding partnership dedicated to supporting UK SMEs. The collaboration entails JPMorgan extending a significant line of committed capital for SME cashflow lending over the next three years.The partnership forms the second phase in the development of SME Capital’s warehousing programme - the first phase being the .......
Market Moves 2 September 2022
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Active autumn?
European ABS/MBS market update
The European and UK ABS/MBS primary market looks set for an active autumn after a lacklustre August. The visible pipeline is beginning to build and a heavy potential refinancing calendar stretches over the next few months.
Finnish auto ABS Tommi 3 was announced last week and is slated to price next week. The deal's top two tranches are .......
News 31 August 2022
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S&P Global bolsters private markets offering
Sector developments and company hires
S&P Global has announced the acquisition of the private markets data solutions provider, Private Market Connect (PMC). The acquisition will integrate the platform into the firm’s market intelligence division and will increase the breadth and depth of its data solutions for Limited Partner and General Partner customers. PMC currently tracks over 15,000 unique funds and US$1.2trn in private markets commitments. .......
Market Moves 31 August 2022
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FFELP forgiveness miss
Student debt relief impact 'unclear'
The Biden Administration last week unveiled its Student Debt Relief Plan, which will cancel up to US$10,000 of federal student loans for borrowers with individual incomes of less than US$125,000 (or US$250,000 for households) and up to US$20,000 for borrowers that received a Pell Grant. While the move is not expected to have a meaningful direct effect on private .......
News 31 August 2022
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The HEAT is on
Subprime auto ABS to feel impact of court ruling
The subprime auto loan ABS market is likely to the first in which the full ramifications of April’s landmark HEAT ruling are felt, say legal experts.
The HEAT verdict means that plaintiffs are now obliged to uncover and specify all the problematic loans before the case begins rather than, as hitherto, as the case progressed. This will entail considerably greater expenditure .......
News 30 August 2022
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Not fit for purpose
EIOPA conclusions 'conceptually flawed'
Following its consultation paper in response to the European Commission’s call for advice on the review of the securitisation prudential framework under Solvency 2 (SCI 16 June), EIOPA has affirmed that it “considers that the current framework is fit for purpose.” However, this conclusion has failed to convince the securitisation industry of its validity.
EIOPA’s broad assessment .......
News Analysis 22 August 2022
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ADB co-financing agreement inked
Sector developments and company hires
ADB co-financing agreement inked
Market Moves 19 August 2022
The Asian Development Bank (ADB) has signed an agreement with five global insurers that will mobilise up to US$1bn of co-financing capacity to support lending to financial institutions in Asia and the Pacific. The Master Framework Program for Financial Institutions will allow ADB to increase its lending to both commercial banks and non-bank financial institutions in .......
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Tangible benefits
Ali Ben Lmadani, founder and ceo of ABL Aviation, argues tha...
Central banks across the globe are tightening monetary policy to curb the highest inflation rate in more than four decades. It’s been a rough ride for consumers – food and living costs have soared, as well as the price of energy. In late July, the US Federal Reserve – which, due to its influence, is a benchmark for the .......
Talking Point 19 August 2022
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Proportional representation
Scaling factor suggested for capital charges
A new Risk Control paper puts forward a scaling factor as a more risk-sensitive method of calibrating capital formulae under SEC-SA. The objective is to encourage European authorities to rectify the incoherence in securitisation prudential rules that exists between actual risk and capital charges at the mezzanine level, and make the senior tranche floor proportional to pool risk weights .......
News Analysis 19 August 2022
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MBS social index proposed
Sector developments and company hires
Fannie Mae has published a proposed methodology for single-family social disclosure, which aims to provide MBS investors with insights into socially-oriented lending while preserving the confidentiality of borrowers. At the core of the methodology are three key outcomes that the GSE is seeking to achieve with its Single-Family Social Index: prioritise borrowers; allow investors to identify pools with high concentrations of .......
Market Moves 18 August 2022
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Unexpected update
Recognition of EU STS securitisations to be extended
Securitisation regulation in the UK has received a surprise amendment, following the publication last month of the new Financial Services and Markets Bill. The Bill is set to provide investors in the UK with access to a larger pool of STS securitisations with the introduction of a new STS equivalence regime for non-UK transactions.
More broadly, the Bill .......
News Analysis 17 August 2022