ABS
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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
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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
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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
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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
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Wrapped ratings upgraded
Sector developments and company hires
Moody's has upgraded the ratings of 148 classes of US structured finance securities wrapped by Assured Guaranty Municipal (AGM), Assured Guaranty (AGC) and their affiliated insurance operating companies, as well as one class of US securities wrapped by AGM. The securities impacted include certain RMBS and ABS notes. The move follows Moody's upgrade of the insurance financial strength (IFS) .......
Market Moves 23 March 2022
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Inequitable frameworks
Data analyses demonstrate punitive ABS treatment
AFME has published two independent data analyses, undertaken by Risk Control, in response to the European Commission’s call for advice regarding bank and insurance prudential capital treatment and the liquidity coverage ratio (LCR). Both reports demonstrate that the current European regulatory framework is disproportionately punitive for securitisation.
One of the Risk Control analyses examines the relative risk of .......
News Analysis 22 March 2022
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Thoughtful approach
Olivier Renault, md, head of risk sharing strategy at Pember...
Q: You joined Pemberton at the beginning of December to establish the firm’s new risk sharing strategy (SCI 1 December 2021). Can you provide some background to this move?
The Structured Credit Interview 21 March 2022
A: The aim of the risk sharing strategy is to leverage Pemberton’s strengths: we have significant origination and credit capabilities, with eight offices across Europe. Although the strategy is global .......
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Equitable Holdings subsidiary to acquire CarVal Investors
Sector developments and company hires
Equitable Holdings has announced the acquisition of CarVal Investors by its subsidiary, AllianceBernstein. The agreement to acquire the global private alternative investment manager with US$14.3bn in AUM falls in line with Equitable Holdings’ strategy to further its differentiated business model and increase returns. CarVal focuses on opportunistic and distressed credit, as well as renewable energy infrastructure, speciality finance, and transportation .......
Market Moves 18 March 2022
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Room to run?
MDB CRT challenges persist
A number of challenges continue to constrain multilateral development bank capital relief trade issuance. This Premium Content article investigates whether these obstacles can be overcome.
The African Development Bank’s (AfDB) landmark Room2Run (R2R) transaction marked the first capital relief trade issued by a multilateral development bank (MDB) and heightened expectations for a boost in such issuance (SCI 20 ......
News Analysis 15 March 2022Premium Content
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Some stabilisation
European ABS/MBS market update
The European and UK ABS/MBS markets saw some elements of stabilisation in the last few sessions of last week. Nevertheless, spreads continue to widen in both a very active secondary and a quiet primary space.
The secondary market saw its busiest week of 2022, with over €350m paper on BWIC and dealers reporting healthy bilateral activity as well. As the .......
News 14 March 2022
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Legacy Libor
Senate passes Libor act, but worries about adequacy of SOFR remain
The US Senate yesterday passed the Adjustable Interest Rate (LIBOR) Act into law, but market sources say the replacement of Libor by SOFR in legacy contracts will precipitate legal action.
Problems are predicted as there is currently a wide and growing disparity between Libor and SOFR settings.
“There’s going to be a lot of law suits. People that were expecting to get a bump .......
News 11 March 2022
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Ratings furore
Industry pushback throws into doubt S&P CMBS ratings action
S&P this week agreed to push back the RFC period for its proposed changes to ratings for securitized securities held by insurers from March 18 to April 29.
This is the second extension to the time allowed for the RFC, which was initially set to end on February 18 when the mooted adjustments were first announced on early December 2021.
In a conference call on .......
News 10 March 2022
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Growing presence
Mia Drennan, president, founder and co-chair of GLAS, answers SCI's questions
Q: What is your strategic vision for GLAS and its continued expansion and growth in the US?
Provider Profile 10 March 2022
A: GLAS was founded in 2011 and we expanded into the US in 2016. Once we secured the necessary regulatory licenses and approvals to operate in the US, we began serving clients on a cross-border basis across the UK, Europe, Australia and the .......
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Carlyle tops rankings on CLO acquisition
Sector developments and company hires
Carlyle is set to acquire from CBAM Partners a portfolio of assets using a combination of US$615m in cash from Carlyle’s balance sheet and approximately 4.2 million newly issued common shares. CBAM’s US$15bn in assets under management - the majority of which are in CLO funds - will be integrated into Carlyle’s global credit platform. The transaction will increase .......
Market Moves 10 March 2022
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Coordinating outfit
ESG advisors gaining traction
ESG advisors are gaining traction in the securitisation market, as sustainability becomes an ever-more import consideration for investors and issuers. This Premium Content article investigates what the role entails.
As sustainability becomes an ever-more important consideration for securitisation investors and issuers, the role of the ESG advisor on transactions is gaining traction. Not only do they assist issuers in ......
News Analysis 10 March 2022Premium Content
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POS ABS prepped
Barclays backstops UK debut
Barclays is in the market with the UK’s first point-of-sale (POS) loan ABS. Dubbed Pavillion Point of Sale 2021-1A, the transaction is backed by a £491.57m revolving pool comprising 894,320 unsecured loans granted to private individuals domiciled in the UK and serviced by Clydesdale Financial Services (CFS).
The seller is Isle of Wight Home Loans, which acquired the .......
News 9 March 2022
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Expectation gap
European ABS/MBS market update
Macro volatility continued to push European and UK ABS/MBS spreads wider last week in a quiet secondary market, with activity further hampered by differences in participants’ expectations. Meanwhile, the primary market remains side-lined.
“As the escalation of the crisis in Ukraine fuels further deterioration in the technical backdrop for financial markets, European ABS spreads extended their sell-off in .......
News 7 March 2022
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Transitioning to green
Call for EU GBS to be extended to securitisation
In a new report examining how to foster transparency and credibility across the EU sustainable securitisation market, the EBA suggests that it would be “premature” to establish a dedicated framework for ‘green’ securitisation. Instead, the authority believes that the forthcoming EU Green Bond Standard (GBS) regulation should also apply to securitisation, providing some adjustments are made to the standard.
News Analysis 2 March 2022
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Team building
Brian Roelke, president and cio of Kuvare Insurance Services, answers SCI's questions
Q: What were the motivations behind the launch of Kuvare Insurance Services’ new third-party asset management business (SCI 8 February)?
The Structured Credit Interview 2 March 2022
A: Unlike a lot of entrants into this space, Kuvare Insurance Services (KIS) started as an insurance-focused asset manager, as all of our activities today are focused on our affiliated insurance balance sheets. The announcement of the new platform signifies .......
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Going digital
Stablecoin securitisation tipped for growth
Appropriate regulation of digital payment could pave the way for the issuance of securitisations in stablecoins. However, this Premium Content article argues that further standardisation across the blockchain ecosystem is needed for the technology to reach a critical mass.
The regulatory attention that digital payment is currently attracting – as exemplified by the US Fed’s recent report on central ......
News Analysis 25 February 2022Premium Content