ABS
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Electric avenue
Electric cars aren't as green as they seem
“Just because you have an electric car it doesn’t make you green,” says the head of liquid assets investment at a large public sector borrower in North America.
He manages a $45bn portfolio of which is between $5bn-10bn is devoted to AAA-rated structured finance products, and he was talking about the difficulty of scoring these deals according to ESG criteria.
While plain vanilla .......
News Analysis 28 January 2022
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Trigger concerns
EBA complicates CRT thickness requirements
The EBA’s consultation paper on regulatory technical standards (RTS) regarding the specification of performance-related triggers for STS synthetic securitisations has largely been welcomed by originators (SCI 20 December 2021). However, one backward-looking trigger pertaining to the thickness of the protected tranche has raised eyebrows.
The consultation stipulates backward- and forward-looking performance triggers that switch a synthetic .......
News Analysis 28 January 2022
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Impact investor acquired
Sector developments and company hires
M&G is set to acquire a majority stake in impact investor responsAbility Investments. Headquartered in Zurich, responsAbility has invested more than US$11bn in private assets across emerging markets since it was founded in 2003 and currently has approximately US$3.7bn of assets under management (as at year-end 2021).
The acquisition is in line with M&G’s strategy to grow its sustainable investment .......
Market Moves 28 January 2022
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Risk limits
US corporate SRT issuance to remain constrained
Issuance of capital relief trades referencing US corporate loans is likely to remain constrained, even though a small pick-up in volume has occurred since 2020 with transactions issued by JPMorgan, Goldman Sachs and HSBC USA. Such deals are expected to be driven less by capital relief requirements and more by considerations pertaining to limit relief, profitability and balance sheet growth.
News Analysis 28 January 2022
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Inflection Point?
European ABS/MBS market update
The European ABS/MBS primary market has been hit by macro volatility this week. While the previous week saw healthy investor demand and firm pricing (SCI 21 January), the current tense backdrop of central banks unwinding and major geopolitical tensions, appears to have affected spreads.
“The primary market has generally been very volatile this week,” notes one ABS/MBS .......
News 28 January 2022
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SME uplift
Further details on Banco BPM SRT revealed
Further details have emerged in connection with Banco BPM’s significant risk transfer trade with the EIB Group (SCI 22 January). The €91m first loss guarantee references a static €1.57bn portfolio of Italian SME loans and will enable Banco BPM to channel €1bn into the Italian economy.
The guarantee supports the working capital requirements and investments of Italian .......
News 28 January 2022
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New hires
Sector developments and company hires
Greystone has announced several new senior hires as it continues to grow its CMBS platform. Jared Noordyk and Natalie Grainger will be joining the firm as head of securitisation and cco, respectively, and will report to head of CMBS, Rich Highfield Noordyk will join the firm from SitusAMC, where he served in a senior role for its CRE Advisory group working .......
Market Moves 26 January 2022
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Remarkable restructuring
Re-tranched NPL ABS set to benefit from GACS
Intesa Sanpaolo last month completed the first restructuring of an Italian non-performing loan securitisation seeking to benefit from the GACS guarantee. Dubbed Penelope SPV, the deal also marks another first for Italian NPL transactions as, at the time of the assignment of ratings, some properties had already been acquired by the associated ReoCo.
“Penelope SPV is unusual because .......
News Analysis 25 January 2022
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New members
Sector developments and company hires
DBRS Morningstar has appointed two new independent non-executive members to its board of directors – Joseph M. Donovan and Katherine L. Frey. Both industry veterans, Donovan presently serves in similar roles on the board of directors at STORE capital and Trip Rail Holdings. Frey previously held role of md at Moody’s, and before this worked on municipal finance, derivatives and .......
Market Moves 24 January 2022
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Primary primary
European ABS/MBS market update
Focus remained on the primary market in European ABS/MBS this week. Another swathe of new issues on offer meant secondary had to again take a back seat.
Five deals priced on the week. All were RMBS and all met with healthy investor demand ensuring support for continued tight levels throughout the stack.
Yesterday saw two deals print – Elstree Funding .......
News 21 January 2022
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Community-focused RMBS prepped
Sector developments and company hires
Community-focused RMBS prepped
Change Lending is in the market with its inaugural RMBS – the US$297.26m CHNGE Mortgage Trust 2022-1. Change is certified by the US Treasury as a Community Development Financial Institution (CDFI). As such, the firm is required to lend at least 60% of its production to certain target markets, including low-income borrowers or other underserved communities.
The .......
Market Moves 21 January 2022
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Junior tranche guaranteed
Sector developments and company hires
Junior tranche guaranteed
The EIB Group and Banco BPM have joined forces to support the working capital requirements and investments of Italian SMEs hit by the Covid economic crisis. In the first operation of this type in Italy, the EIB and the EIF will provide a guarantee of €91m on a junior tranche of a synthetic securitisation that references a portfolio of .......
Market Moves 20 January 2022
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SME mission
Alain Godard, EIF chief executive, discusses Europe's post-C...
Q: What are the ways in which the EIF utilises securitisation to further its mission?
A: Central to the EIF’s mandate is, of course, our support to SMEs across Europe. There are naturally many ways or various instruments to achieve that, including securitisation.By facilitating the execution of securitisation transactions, we provide guarantees to banks and financial institutions, allowing .......
The Structured Credit Interview 19 January 2022
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Same as ever?
Davis+Gilbert partner Joseph Cioffi reflects on the performa...
The pandemic has been a surprising boon to the subprime auto ABS market, due to supply issues that have raised collateral values and a potent mix of government support and private actions that have bridged consumers through financial distress. The pandemic’s persistence is now calling into question how long favourable conditions may continue and what normalisation will look like. .......
Talking Point 18 January 2022
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New leadership
Sector developments and company hires
Crestbridge has appointed Martin Lambert as its new head of UK operations following the retirement of former boss Paul Windsor. Lambert will join the firm with more than 30 years of experience in the field, having most recently served as partner at Grant Thornton. Based in London, Lambert will work as part of the senior leadership team to continue its .......
Market Moves 17 January 2022
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Strong start
European ABS/MBS market update
European ABS/MBS got fully underway for 2022 over the past week. Both primary and secondary markets saw strong execution and a building pipeline.
The first two new issues of the year are due to price today – Dutch BTL RMBS Jubilee Place 3 and UK non-conforming RMBS Tower Bridge Funding 2022-1. The former saw its class A spread .......
News 14 January 2022
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Navient agrees multi-state settlement
Sector developments and company hires
Navient agrees multi-state settlement
Navient has reached agreements with 39 US state attorneys general to provide relief totaling US$1.85bn to resolve their multi-state litigation and investigations in connection with allegations of unfair and deceptive student loan servicing practices and abuses in originating predatory student loans. In the agreements, Navient expressly denies violating any law - including consumer-protection laws - or causing .......
Market Moves 14 January 2022
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Texas rising
New Texas Capital broker dealer eyes securitization
Texas Capital Bank has launched a broker dealer subsidiary, which is expected to extend its reach to the securitization market before the end of this year, says the Dallas-based bank.
“The way we’re thinking is that securitization would be the logical extension of our business. It would not be surprising to see us as the co-manager or even a lead manager on .......
News 13 January 2022
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Greek NPL JV agreed
Sector developments and company hires
Mount Street Group has received regulatory approval from the Bank of Greece to form a strategic partnership with Technical Olympic, a real estate, construction, shipping and investment group. The joint venture is effectuated through Technical Olympic’s subsidiary, PFC Premier Finance Corporation (Cyprus), and will pursue investment and co-investment non-performing loan opportunities in the real estate, shipping, infrastructure, renewable energy, hospitality .......
Market Moves 13 January 2022