ABS
-
MSCI and MarketAxess collaborate
Sector developments and company hires
MSCI has announced its entry into a strategic collaboration with MarketAxess to establish new portfolio analytics solutions and fixed income indexes. The two firms hope to improve the fixed income investment process, empower investors, and drive innovation through their collaboration by developing portfolio optimisation, trading, and analytics tools. The collaboration will rely on MarketAxess’ fixed income indexes and AI-informed pricing .......
Market Moves 29 April 2022
-
A buyer's market
European ABS/MBS market update
Following a flurry of deal announcements (SCI 22 April 2022), the primary European and UK ABS/MBS markets were extensively testing investor demand during the week. With so many deals to absorb, deal performance has been disparate.
In a context of large volumes of paper, UK RMBS transactions were playing a central role with four transactions hitting the market. On .......
News Analysis 29 April 2022
-
Fasten your safety belts
Aircraft ABS set for further turbulence
The fallout from the Ukraine crisis is likely to affect the entire aircraft ABS market, rather than simply those deals with exposure to Russian assets. This Premium Content article outlines why the sector is bracing for a bumpy ride.
The Russia-Ukraine conflict has exposed fault lines in the aircraft ABS market that participants had hitherto tended to .......
News Analysis 22 April 2022
-
Ex-employees resurrect Highland
Sector developments and company hires
Ex-employees resurrect Highland
A trio of former senior Highland Capital Management portfolio managers have resurrected the firm under a new moniker, Highland ERA Management. Patrick Daugherty – who was partner, senior CLO portfolio manager and head of distressed/special situations at Highland – is partnering with ex-Highland team members Kevin Rourke and Niles Chura in the venture.Through a sub-advisory .......
Market Moves 22 April 2022
-
Full steam ahead
European ABS/MBS market update
With seven deals marketing, the European and UK primary ABS/MBS markets are set for bustling days ahead. While the market remained relatively unmoved either side of the Easter break, this strong surge in deals all scheduled for next week will certainly test investors’ appetite.
“With so many deals being announced, the doors are clearly open,” notes one European .......
News 22 April 2022
-
New name
Dutch auto lease ABS debuts
Hiltermann Lease is in the market with a rare Dutch auto ABS. The lender’s inaugural transaction, dubbed Hill FL 2022-1, is backed by a €500m pool comprising 33,744 financial lease contracts to 30,896 lessees (see SCI's Euro ABS/MBS Deal Tracker).
The assets were distributed through dealers to self-employed and commercial borrowers to finance the purchase of new (accounting for .......
News 20 April 2022
-
Finding funding
European solar ABS tipped for acceleration
Securitisation could play a vital role in funding the European energy transition, with households likely to bear the brunt of the switch to renewable energy. As the Ukraine conflict continues to raise concerns over Russian energy dependency across Europe, the development of a solar ABS market in the region is expected to accelerate.
Following on from forced sustainable .......
News Analysis 14 April 2022
-
Dutch courage
European ABS/MBS market update
The European and UK ABS/MBS markets are looking to take full advantage of a recent surge in activity. This week, with a number of deals due to price, the market will try to maintain its strong momentum into the Easter break.
After feeling the full effects of macro volatility, the European and UK ABS/MBS markets have over the .......
News 12 April 2022
-
Hellenic ABS inked
Project Starlight package transaction agreed
Hellenic Bank has agreed a package transaction involving the securitisation of the Starlight Portfolio – which comprises circa €1.32bn of non-performing exposures - and the sale of its servicing platform, APS Debt Servicer, to Oxalis Holding. Upon completion, the agreement will de-risk the bank's balance sheet by reducing NPEs by €720m, resulting in a residual NPE portfolio of circa .......
News 11 April 2022
-
Perfect storm
Cat bond market set for exponential growth?
With the climate threat menacing ever more, is the catastrophe bond market set to see exponential growth? This Premium Content article investigates.
This year, the catastrophe bond sector reached a landmark anniversary, marking 25 years since its inception. This follows record levels of issuance in 2021, with the market seeing volumes of US$12.5bn, surpassing the previous record of US$11bn ......
News Analysis 11 April 2022Premium Content
-
Dual shocks
Securitisation well positioned to withstand headwinds
The Covid-19 shock has been replaced by two others - war and worse-than-expected inflation (SCI 7 April). However, the securitisation market appears to be well positioned to withstand these headwinds.
“We came into the year coming out of one shock – pandemic - only to be hit by two others: worse-than-expected inflation and now war. Those new shocks are .......
News Analysis 8 April 2022
-
Stag night
US ABS in good place to absorb impact of raging inflation
Even if the US economy were to plummet into stagflation, the ABS market will suffer only minor negative ratings consequences, according to analysis conducted by Fitch.
There would be virtually no effect on ratings in 67 out of the 78 sub-sectors reviewed, it says.
The bulk of ABS deals were well-positioned at the start of this year in terms of the strength of .......
News 7 April 2022
-
Mind the gap
Alternative data, RMBS to help address wealth inequality
Securitisation could prove a useful tool in addressing the growing wealth inequality gap. Indeed, the technology is already channelling capital towards underserved communities, aided by CDFI-backed RMBS and alternative data being used to calculate credit scores.
Elen Callahan, head of research at the Structured Finance Association, believes that the use of alternative data to assess consumer credit scores .......
News Analysis 6 April 2022
-
Cautious optimism
European ABS/MBS market update
Following a clear pick-up in activity last week, the European and UK primary ABS/MBS markets have carried over that dynamism into this week. Optimism is, it seems, back on the cards for now.
“Well, I think things are much more positive,” states one European ABS/MBS trader. “We have seen a big turnaround in the market, where a lot .......
News 1 April 2022
-
Robotic revolution
QSR innovation continues to bolster WBS performance
Issuers of quick-service restaurant (QSR) whole business securitisations adopted a number of strategies to survive the Covid-19 pandemic. As trends towards off-premise dining and delivery continue to produce increased revenue, these strategies are expected to continue supporting performance across the segment.
US QSR WBS issuance last year increased by 88% from 2019 and by a total 300% compared .......
News Analysis 1 April 2022
-
Quality control
Call for ESG data improvements
The lack of clear, unified standards continues to constrain the wider adoption of ESG securitisation in the EU. In order to fulfill investor demand for such product, both the quality and quantity of ESG data needs to improve, according to panelists at SCI’s recent ESG Securitisation Seminar.
Andrew Lennox, portfolio manager at Federated Hermes, pointed out that pricing .......
News Analysis 30 March 2022
-
Guarantee on tap
WBS liquidity facility replaced
Assured Guaranty UK (AGUK) has issued a £170m five-year debt service reserve (DSR) guarantee to benefit Yorkshire Water Services, part of the Yorkshire Water group. The guarantee was structured to fit within Yorkshire Water Services’ existing whole business securitisation and comes as banks increasingly retreat from providing securitisation liquidity facilities.
The securitisation requires a debt service facility to .......
News 30 March 2022
-
-
Ratings cap?
Risks in BNPL-backed securitisations weighed
The buy now, pay later (BNPL) market is growing rapidly, matched by an evolving regulatory environment. While issuance of securitisations backed by BNPL assets is expected to rise in Europe over the coming years, such transactions will bring their own analytical challenges.
BNPL is a form of consumer credit, whereby goods and services are paid for in instalments .......
News Analysis 25 March 2022
-
Lumpy SOFR
New Libor bill fails to clear up potential Libor versus SOFR mismatch
The signing of the Adjustable Rate Libor Bill (H.R.4616) into law eight days ago introduces important clarity into the Libor transition process, but the structured finance market is very far from out of the woods yet.
The bill creates a safe harbour for contracts lacking a specfied replacement rate for Libor and directs the Federal Reserve, when necessary, to determine a new .......
News 23 March 2022
-
Window of opportunity
European ABS/MBS market update
This week is seeing clear evidence of a pickup in activity in the European and UK ABS/MBS primary markets. In what feels like an intermediate period of opportunity for issuers, the announcement of a flurry of transactions should test investor appetite and overall market conditions.
“After a period that saw huge levels of issuance for covered bonds, our .......
News 23 March 2022