ABS

  • Tobacco bonds on review

    Moody's has placed under review with direction uncertain a number of term tobacco settlement revenue bonds. The transactions are securitisations of payments that major tobacco manufacturers owe to 46 states and certain territories, pursuant to the 1998 Master Settlement Agreement (MSA).

    The rating actions are a result of credit implications of the proposed agreement announced on 18 December 2012, to .......

    News Round-up 23 January 2013

  • Regulatory change could spur Aussie issuance

    Regulatory changes could have a significant impact on Australian structured finance issuance in 2013, Fitch says. Specifically, the potential revision of Prudential Standard APS120 would have a direct impact on issuance levels by determining the capital treatment of securitisations and potentially opening up new issuance structures.

    A draft paper on APS120 is expected early this year. The possible changes mooted .......

    News Round-up 23 January 2013

  • CRA work plan released

    The European Securities and Markets Authority (ESMA) has published its '2013 CRA Supervision and Policy Work Plan', which sets out the key elements of its supervisory programme for the 19 registered and one certified credit rating agencies (CRAs) in the EU. The aim is to embed good practices internally at CRAs and to ensure that they meet the requirements of .......

    News Round-up 23 January 2013

  • Future of ABCP to be determined

    US ABCP outstandings are likely to remain flat or modestly decline, according to S&P, until the SEC clarifies the extent to which the Volcker Rule will apply to ABCP conduits. If the SEC determines that the Volcker Rule will apply in all respects to ABCP conduits, the agency projects outstandings to decline from US$308.9bn to US$230bn-US$250bn by end-2013. However, if .......

    News Round-up 22 January 2013

  • Year of the cat?

    ILS issuance and innovation to increase

    Vitality Re IV - the first catastrophe bond of 2013 - priced last week as the insurance-linked securities market got up and running. Supply this year is expected to reach new heights, while further innovation and diversification are also forecast.

    "To already have a deal in the market is a good start. We are used to seeing deals coming early .......

    News Analysis 22 January 2013

  • Aircraft ABS eyed for yield

    Aircraft ABS prices rallied during the third and fourth quarter, as investors sought to add risk, especially in assets that provide extra yield. ABS analysts at Wells Fargo note that the aircraft ABS market has neatly bifurcated by vintage, with limited overlap in the investor bases for the two different types.

    Older pre-9/11 deals now price at or near the .......

    News Round-up 21 January 2013

  • Assured wraps targeted

    Moody's has downgraded the ratings of 225 classes of US structured finance securities wrapped by Assured Guaranty Municipal Corp (AGM), Assured Guaranty Corp (AGC) and their affiliated insurance operating companies. The affected securities include certain RMBS, ABS, structured notes and Trups CDOs.

    The action is solely driven by the agency's downgrade of the insurer's insurance financial strength (IFS) ratings (SCI .......

    News Round-up 21 January 2013

  • Euro SF volume tough to call

    European structured finance volume for 2013 remains difficult to call. For example, while S&P expects overall investor-placed issuance to fall over the year, Fitch forecasts a rise of 5%.

    Fitch predicts that public and retained European structured finance issuance this year will be broadly unchanged from 2012, at about €200bn. Of this figure, 40% is expected to be placed with .......

    News Round-up 16 January 2013

  • RRN upgrades on the cards

    S&P believes that, in certain circumstances, the remarketing of reset-rate notes (RRNs) issued in connection with certain US student loan ABS might result in an upgrade of the notes' ratings. If RRNs are remarketed into US dollars, it would terminate the existing swap agreement and thereby eliminate the class' direct exposure to counterparty-related risk.

    RRNs typically have an initial reset .......

    News Round-up 16 January 2013

  • Treasury calls time on TALF

    TALF is being wound down, following the repayment of the programme with interest. Accounting for interest and other gains above principal, repayments to date from the programme total US$173m - with additional payments expected in the future.

    TALF supported the issuance of nearly three million auto loans, more than one million student loans, nearly 900,000 loans to small businesses, 150,000 .......

    News Round-up 16 January 2013

  • Mixed outlook for Japanese SF performance

    Moody's believes that strict underwriting standards in Japan will support the performance of RMBS and ABS receivables in the jurisdiction during 2013. The weak real estate market is expected to have a negative effect on CMBS transactions, however.

    Overall performance of RMBS collateral in new and existing deals will remain stable this year, according to the agency, due to the .......

    News Round-up 15 January 2013

  • Container fundamentals examined

    The fundamentals of container leasing remain strong, according to ABS strategists at Wells Fargo. They note that container lessors should continue to benefit from a tight supply environment while demand increases.

    Spreads on pre-crisis container bonds are consequently expected to tighten inside of 100bp during 1Q13. At the same time, the Wells Fargo strategists believe that the current premium over .......

    News Round-up 14 January 2013

  • Bullish outlook for EM securitisation

    S&P says it is bullish on structured finance in emerging markets going into 2013, though it warns that each country's unique situation warrants careful scrutiny. A rebounding Mexican economy and Brazil's uncertain regulatory environment is expected to anchor Latin American activity, while the focus in EEMEA will be split between Russian and South African domestic activity and cross-border issuance in .......

    News Round-up 14 January 2013

  • Record low for credit card charge-offs

    US credit card ABS finished 2012 strongly. Fitch's latest index results show charge-offs reached another record low as the year ended.

    Prime credit card charge-offs went below 4% for the first time since 2006. They declined 18bp in December to 3.98% as a result of declining bankruptcy filings delinquencies throughout the year.

    Late stage delinquencies increased 3bp to 1.73% although .......

    News Round-up 11 January 2013

  • DPC criteria updated

    Fitch has updated its rating criteria for derivative product companies (DPCs). The agency confirms that it will look to the DPC's stand-alone credit strength, as well as the sponsor's, when rating vehicles engaging in standardised, liquid derivatives.

    Under the criteria, a ratings floor of single-A will apply for continuation DPCs that are well-capitalised and appropriately structured, whereas a ratings floor .......

    News Round-up 8 January 2013

  • Innovative sidecar debuts

    Argo Group International has formed Harambee Re 2013-1, its debut sidecar transaction. Unlike other sidecars, which typically write either reinsurance or retrocession business, the vehicle is believed to be the first to support both a reinsurance and an insurance portfolio.

    Harambee Re provides capacity of approximately 5% of premium income for specific property portfolios that represent two of Argo Group's .......

    News Round-up 8 January 2013

  • ILW pro recruited

    JLT Reinsurance Brokers has appointed Paul Thyer as partner. He becomes a member of the firm's London non-marine treaty team and will focus on property retrocession, property reinsurance and industry loss warranties.

    Thyer was most recently associate director of BMS Re. He has 32 years' experience within the reinsurance industry as a London market retrocession, reinsurance and ILW broker.

    .......

    Job Swaps 8 January 2013

  • Autos, cards lead ABS charge

    US auto and credit card ABS paper was being shown on Friday as the secondary market began to open up. SCI's PriceABS data shows 21 ABS line items from the session.

    "Secondary market activity has picked up as the week comes to a close, while the primary market remains quiet. An afternoon list containing blocks of senior auto and credit .......

    Market Reports 7 January 2013

  • Continued credit card ABS improvement

    US securitised credit card charge-offs decreased from 4.07% in October to a six-year low of 3.90% in November, according to Moody's latest index report. The improvement extends the steady decline since charge-offs peaked in 2010 and the charge-off rate index is now expected to remain between 3.5% and 4.5% over 2013.

    The delinquency rate index remained unchanged in November at 2.37% .......

    News Round-up 4 January 2013

  • Further prime, subprime auto divergence

    US prime auto ABS continued to perform strongly at the end of 2012, but the latest index results from Fitch show that subprime loans again took a step back. The agency expects stable asset performance for prime auto ABS this year, with a continuing positive rating outlook.

    Prime auto ABS had the strongest year-to-date, with losses dropping to record lows .......

    News Round-up 4 January 2013

  • Italy, Spain ABS reviews complete

    Moody's has revised key collateral assumptions in 29 Italian and Spanish ABS transactions backed by consumer and auto loans. New loss assumptions generally have no rating impact, although certain transactions have been downgraded.

    The rating revisions follow the agency's review of the Italian and Spanish auto and consumer loan sectors and were primarily driven by collateral performance deterioration as a .......

    News Round-up 24 December 2012
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