ABS

  • Swap risk remedies discussed

    Providing collateral with significant cushion remains an important remedy to counterparty ineligibility in a structured finance cross-currency swap, according to Fitch. The agency adds that only allowing replacement as a remedy with little or no collateral posting beforehand exposes noteholders to extra risks.

    "Without collateral providing ample support, both structured finance and covered bond issuers can accumulate significant exposure to .......

    News Round-up 18 September 2013

  • Fixed-, floating-rate income compared

    US fixed-rate ABS should provide significantly more income than floating-rate bonds, unless the Fed tightens policy sooner or more aggressively than expected, according to Wells Fargo ABS strategists. In addition, fixed-rate bonds may offer better total return potential as they roll down the steeper yield curve.

    The three-year swap rate has risen from about 0.5% at year-end 2012 to just .......

    News Round-up 17 September 2013

  • FADE issuance limit upped

    Fitch has confirmed that Fondo de Titulizacion del Deficit del Sistema Electrico's (FADE) ratings - currently triple-B - will not be affected by the latest modifications included in the programme documents. This follows the Royal Decree 9/2013 approved in July by the Spanish Government.

    The agency has analysed the documents provided by FADE's management company (Titulizacion de Activos SGFT) and .......

    News Round-up 17 September 2013

  • Timeshare delinquencies hit post-2007 lows

    Quarterly US timeshare ABS delinquencies have fallen to the lowest level since 2007, according to Fitch's latest index results for the sector. Total delinquencies for 2Q13 were 3.05%, down from 3.27% in 1Q13 and 3.29% in 2Q12.

    Defaults for 2Q13 remained consistent with 1Q13, finishing at 0.72%. However, they are down from the 0.82% observed at the same time last .......

    News Round-up 17 September 2013

  • Private student loan defaults drop

    Moody's reports that its private student loan default rate index dropped to 3.6% in 2Q13, the first time it has dipped below 4% since 2007. The agency expects the index to continue falling year over year in 2013, but remain above pre-recession rates.

    "The default rate index will continue to fall in 2013, but will remain higher than average pre-recession .......

    News Round-up 16 September 2013

  • New law set to unlock Russian ABS

    The Russian government is reviewing a proposed legislative change that would allow banks to securitise a broad range of assets, including SME loans, consumer loans, credit cards and auto loans. Moody's notes in its latest Credit Insight publication that the move is credit positive for Russian originators, as it will: allow the domestic issuance of Russian-law governed non-mortgage ABS; facilitate .......

    News Round-up 13 September 2013

  • NCR proposals 'credit positive'

    The French government is proposing to create a National Credit Registry (NCR) that captures individual consumer loan indebtedness. Moody's notes in its latest Credit Insight publication that the creation of such a registry is credit positive for most French auto ABS, consumer ABS and RMBS, as it will improve the ability of lenders to assess borrower affordability.

    The agency suggests .......

    News Round-up 13 September 2013

  • Punch restructuring progressing?

    Punch Taverns has disclosed that it is continuing its engagement with stakeholders, which now includes the ABI special committee of noteholders and its advisers. Barclays Capital European securitisation analysts suggest that this means class A bondholders could be actively involved and thus restructuring negotiations are likely being held on a more constructive basis (SCI passim).

    "We continue to take a .......

    News Round-up 13 September 2013

  • Insurance private debt strategy offered

    Twelve Capital has launched an insurance private debt strategy, which aims to provide small and medium-sized insurers with an additional source of regulatory capital while generating attractive risk-adjusted returns for the firm's investor base. This will take the form of bilateral loans or private placement bonds, benefitting from Twelve Capital's existing expertise in collateralised reinsurance and insurance fixed income. As .......

    News Round-up 13 September 2013

  • Trade finance leader brought in

    JPMorgan has appointed Kah Chye Tan as md and global head of trade finance securitisation, based in London. It is a new role at the firm which will see Tan work directly with the global trade and markets teams.

    Tan was previously at Barclays, where he was corporate banking vice chairman, having earlier served as global head of trade and .......

    Job Swaps 13 September 2013

  • Mix of paper in busy ABS session

    A US$110m bid-list of dealer floorplan bonds boosted auto ABS secondary supply yesterday. Credit card and utility ABS paper was also represented, as BWIC volume for the sector reached US$285m.

    SCI's PriceABS data shows that the majority of the auto names were from 2012 and 2013 issuances. An exception to that was the HERTZ 2010-1A A2 tranche, which .......

    Market Reports 12 September 2013

  • FFELP SLABS value touted

    FFELP student loan ABS spreads have generally lagged the tightening witnessed in other US consumer ABS sectors since early July and remain substantially wider than they were a year previously. Wells Fargo structured product analysts suggest that the asset class offers good relative value for its wider spreads and income potential, especially given one-month Libor is likely to stay low.

    News Round-up 12 September 2013

  • Reset notes to be redenominated

    GCO Education Loan Funding Master Trust II has executed a fifth supplemental indenture, which will permit the series 2006-2 reset rate notes to be remarketed on the initial reset date (10 September) in US dollars in a principal amount not to exceed US$249.51m, with an interest rate not to exceed 65bp over one-month Libor. The notes are currently denominated in .......

    News Round-up 11 September 2013

  • Iberian tariff deficit plans compared

    Portugal's plans to eliminate its electricity tariff deficit (TD) are more credible than Spain's, Fitch suggests. The agency says that Portugal's plans benefit from a deadline for TD elimination, a detailed agenda and supervision process, and regulatory independence. These elements are either absent from or less well developed in Spain's roadmap, it adds.

    Outstanding TDs in Portugal were 45% of .......

    News Round-up 10 September 2013

  • Reporting compliance enabled

    The ECB has enhanced the loan-level reporting requirements for RMBS and SME ABS that are used as collateral in Eurosystem monetary policy operations but are unable to satisfy the previously announced implementation timeline. The enhancements aim to ensure a smooth transition to full compliance while ensuring a level playing field between RMBS and SME ABS at different stages of the .......

    News Round-up 9 September 2013

  • Card performance reaches record levels

    US credit card ABS performance registered positive gains across the board in July, according to Fitch's latest index results for the sector. Several performance metrics managed to break record levels during the month.

    Fitch's 60+ Day Delinquency Index for August (covering the July collection period) registered yet another record low, dropping by 4bp. Late-stage delinquencies fell to 1.3%, a fifth .......

    News Round-up 5 September 2013

  • E-cigarette proliferation to hit MSA payments?

    A possible increase in market share for e-cigarette products in the US could reduce payments to settling states under the Master Settlement Agreement (MSA), Fitch suggests. E-cigarette sales are projected to pass traditional cigarette sales by 2047, which could put downward pressure on tobacco settlement ABS ratings.

    The annual MSA payment is determined based on inflation and the amount of .......

    News Round-up 5 September 2013

  • Wage pressures weigh on Arsenal bonds

    Arsenal Football Club's record signing of Mesut Ozil for £42.5m could be a concern for Arsenal Securities bondholders if it is followed by more significant transfers in the January transfer window, according to securitisation strategists at Barclays Capital. Increased wage pressures at the club raise the risk of the wage-to-revenue ratio rising above 70% - a level at which Fitch .......

    News Round-up 3 September 2013

  • Euro ABS may stay quiet

    It has been a typically quiet August for European ABS as traders take their holidays, although there has been some BWIC activity to keep those that remained at their desks occupied. However, there is a growing concern that this September may not bring the pick-up in activity that is traditionally seen.

    "This has been a quiet month, which is what .......

    Market Reports 30 August 2013

  • Punch securitisation deemed weak

    Punch Taverns' Punch A securitisation business profile has been revised down to weak by S&P, affecting the credit ratings on the class A1, A2, M1 and M2N notes. The B1, B2, B3, C and D1 notes have been affirmed and the outlook remains negative.

    S&P has previously viewed Punch A as stronger than Punch B, but has now revised it .......

    News Round-up 30 August 2013

  • UK card trusts to avoid mis-selling pain

    The mis-selling of identity theft and fraud protection to UK credit card borrowers should not be detrimental to UK credit card trusts, says Fitch. The agency notes that payment protection insurance (PPI) mis-selling occurred on a larger scale without affecting trust performance.

    Seven million borrowers could be entitled to compensation, with a compensation scheme set up under which £1.3bn could .......

    News Round-up 30 August 2013
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