ABS
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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
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Symbiotic relationship
'Recharacterisation' underway for European ABS
The paucity of European publicly placed securitisations in recent months, against a backdrop of challenging conditions, is seen as a symptom of a market that is overregulated and has too few participants. Against this backdrop, a seemingly symbiotic relationship between the public and private securitisation markets is emerging.
“The market for publicly issued securitisation bonds is too illiquid .......
News Analysis 12 August 2022
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DLT powers bank subordinated debt deal
Sector developments and company hires
DLT powers bank subordinated debt deal
Market Moves 12 August 2022
Blockchain-powered fixed income platform Brightvine and Angel Oak Capital Advisors have launched what is believed to be the first-ever bank subordinated debt issuance leveraging blockchain technology. A US$147.55m securitisation backed by subordinated debt issued by community banks across the US, BFNS 2022-1 leverages Brightvine Portal, a secure management platform for conducting primary offerings of .......
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On the cards
Credit card ABS strength likely to attenuate into 2023
The resilience of the credit card ABS market in the face of rampant inflation has surprised analysts, but delinquency rates will increase from the beginning of next year, they say.
Covid-era stimulus payments and delinquency moratoriums by banks, plus lack of spending opportunities, have protected consumers from surging prices so far, but these factors will be of diminishing importance by the end .......
News Analysis 28 July 2022
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Trade finance tokens unveiled
Sector developments and company hires
Trade finance tokens unveiled
Market Moves 26 July 2022
Tradeteq has selected XinFin’s XDC Network to launch TRADA tokens, believed to be the first-ever fully regulated trade finance-backed fungible security tokens. The move is expected to deliver liquidity to the trade finance sector by securitising a traditionally illiquid asset class on the XDC Network public blockchain and extending access to the sector to both retail .......
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Golden opportunity?
Basel 4 raises Japanese SRT prospects
Japanese banks have historically been well-capitalised, but implementation of the Basel output floors could change this. Against this backdrop, this Premium Content article investigates the prospects for capital relief trade issuance in the jurisdiction.
Japanese banks are expected to boost their issuance of significant risk transfer transactions as the implementation of the Basel output floors draws near. ......
News Analysis 22 July 2022Premium Content
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Changing perceptions
Need for liquidity supporting TRS growth
Rapid growth in trade receivables securitisation (TRS) volumes has been accompanied by an apparent change in perception of the asset class, from being overly complex to now being widely considered as an important funding instrument for the real economy. Through the pandemic - and ever since - TRS has been embraced as a flexible solution for corporates seeking to .......
News Analysis 21 July 2022
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Relative rebound
European ABS/MBS market update
The penultimate week of July has seen activity rebound in the UK and European ABS/MBS primary markets. Although no widely distributed deals have yet been seen, issuance flows have been encouraging in comparison to recent weeks.
Facing continuing broader macroeconomic concerns exacerbated by political turmoil in Italy, issuers sought to get ahead of today’s long-awaited ECB rate rise by picking .......
News 21 July 2022
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'Penalising' RBC proposal criticised
Sector developments and company hires
‘Penalising’ RBC proposal criticised
Market Moves 21 July 2022
The LSTA has submitted a comment letter to the NAIC expressing its belief that the NAIC’s risk-based capital (RBC) proposal could penalise insurance company investments in CLOs and consequently impact the CLO and loan markets. The proposal would change the RBC framework such that capital requirements for purchasing all tranches of a CLO match the capital .......
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Looking for labels
Second-party opinions gaining traction
A total of 17 securitisations with second-party opinion (SPO) labels have been issued in Europe since 2016. With ESG factors playing an increasingly important role in investment decisions, tiering could emerge between transactions based on whether they have an SPO or not.
“There appears to be a trend: if you are an arranger or issuer, you check if you can .......
News 15 July 2022
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Prepayments on the cards
FFELP loan cancellation widely anticipated
President Biden is widely expected to introduce a large-scale student loan forgiveness programme ahead of the US mid-term elections in November. One of two administrative mechanisms is likely to be adopted to implement the programme, each of which would have a significant impact on the over US$90bn FFELP student loan ABS market.
“US consumers are facing a slippery .......
News Analysis 14 July 2022
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Making hay
New equilibrium for Australian securitisation market
In contrast to Europe and the UK, the Australian securitisation market is continuing to see healthy issuance activity, despite the country dealing with the same inflation and rates pressures as the rest of the world. This Premium Content article investigates why it’s always sunny Down Under.
After an extraordinarily busy 2021 - with A$48.79bn publicly placed across 64 individual ......
News Analysis 14 July 2022Premium Content
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Expiration concerns
Questions raised over the end of HAPS
The Greek HAPS programme is set to expire in October, having helped to considerably reduce the non-performing exposures of the country’s systemic banks. However, there is concern that its expiration may be premature, given the possibility of future asset deterioration on bank balance sheets.
“With the Russian invasion of Ukraine, high energy prices and possible energy bottlenecks, there is more .......
News Analysis 13 July 2022
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Uncertainty prevails
Macroeconomic backdrop in focus
Thus far, 2022 has experienced some turbulent and choppy market conditions. Although poor performance has not yet affected the securitisation sector, the consensus – at least, in evidence during AFME and IMN’s Global ABS conference last month – is that uncertainty prevails and investor sentiment is predominantly focused on the macroeconomic backdrop.
During this period of market dislocation, .......
Talking Point 12 July 2022
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Pre-summer comeback?
European ABS/MBS market update
With one deal pricing, the UK and European ABS/MBS markets reopened this week. As the summer break is fast approaching, issuers will have a short window to come to market.
This week, Premium Credit brought a fifth issue from their PCL master trust. The PCL Funding 2022-1 transaction - which priced yesterday - saw decent demand across the capital stack, .......
News 1 July 2022
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Over the HIL?
Home improvements drive resurgence in HELOC RMBS
Total spending on home improvements and repairs in the US reached US$369bn in 2021, an increase of 9.4% year-over-year, according to Harvard University’s Joint Center for Housing Studies. Home improvement loans (HILs) have emerged as an alternative form of financing for these renovations, particularly for those who lack substantial equity in their homes, while HELOC securitisations are also seeing .......
News Analysis 30 June 2022
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Better methods?
New definitions for green, social securitisations
ICMA has released new definitions for green and social securitisations, together with additional resources for climate transition finance under its update of the Green Bond Principles (GBP), Social Bond Principles (SBP), Sustainability Bond Guidelines (SBG) and Sustainability-Linked Bond Principles (SLBP). In a Q&A document published in conjunction with the updates, the association further clarifies that synthetic securitisations require additional .......
News 29 June 2022
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Chain reaction
US container and railcar ABS examined
Global supply chain issues could continue to support US container and railcar ABS. However, as this Premium Content article shows, both markets are facing challenges on other fronts.
As with most other US esoteric ABS sectors, the container and railcar markets suffered when Covid-19 first hit. However, the more broadly driven - though pandemic exacerbated - global .......
News Analysis 27 June 2022
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Suit filed over alleged CMBS fraud
Sector developments and company hires
Suit filed over alleged CMBS fraud
Market Moves 27 June 2022
Kasowitz Benson Torres, as counsel to investment vehicles associated with Carl Icahn, has filed a complaint in Nevada state court against Rialto Capital Advisors for breach of contract and fraud. The case is in connection with Rialto’s servicing of a CMBS trust (COMM 2012-CR4) secured by the Prizm Outlets mall in Primm, Nevada, which .......