ABS
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Forbearances plunge
Fresh data reveals biggest drop in forbearances in a year
The largest drop in the number of US mortgages in forbearance in 12 months was recorded last week in the seven days ending October 4 according to Black Knight data released today.
Active forbearance plans fell by 177,000, or 11%, with healthy declines recorded across all investor classes. There has been a reduction of forbearances of 294,000 in the last 30 days, which .......
News 8 October 2021
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Credit recovery
Rating upgrades outpace downgrades
Rating upgrades are outpacing downgrades this year, although net upgrades so far represent only about 12% of the net Covid-induced downgrades in 2020. Still, credit outlooks in aggregate have stabilised and returned to pre-pandemic levels, while default rates have fallen sharply and are trending towards their long-term average.
According to S&P, credit quality continues to recover slowly from .......
News 8 October 2021
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Landmark guarantee inked
ThinCats and BBB seal agreement
The British Business Bank and alternative lender ThinCats have finalised a guarantee agreement via the former’s ENABLE Guarantee programme. The guarantee will provide up to £300m of additional funding for UK SMEs and midcaps. The transaction features a warehouse facility provided by Citi and it is the first under the ENABLE programme to facilitate lending to smaller businesses from .......
News Analysis 8 October 2021
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Green light
Record second-hand car prices fuel RV opportunities
Rising used car prices are positive for auto ABS transactions with exposure to residual values (RVs). Indeed, opportunities could emerge for deals with RV risk to outperform rating agency assumptions, which could – in turn – lead to rating upgrades.
Car values usually start depreciating as soon as they leave forecourts, but figures from Auto Trader - an automotive advertising .......
News Analysis 7 October 2021
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Chopra on the march
CFPB to expand its role and come down harder on securitisation
The securtisation market will see a more aggressive CFPB under the leadership of recently appointed director Rohit Chopra, with “more frequent enforcements and bigger fines,” according to Rachel Rodman, a partner with Cadwalader, Wickersham and Taft.
Rodman was speaking yesterday (5 October) at the annual SFA conference in Las Vegas on a panel addressing the future of housing .......
News 6 October 2021
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Untapped markets
French NPLs gaining attention
Southern European jurisdictions continue to witness strong activity in the non-performing loan space, especially in Greece and Cyprus. At the same time, investor interest in French NPLs is on the rise.
“Investors are looking further afield for opportunities in such markets where others aren’t necessarily looking. They are exploring opportunities everywhere that they can,” observes Amo Chahal, md .......
News 6 October 2021
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Libor warnings
Senior Fed governor spells things out for the SFA
Federal Reserve vice chair of supervision Randal Quarles fired a shot across the bows – very close to the bows – of the structured finance market this morning (October 5th) when he addressed the SFA conference in Las Vegas on the topic of Libor transition.
“The year of magical thinking is over,” he said, quoting the title of Joan Didion’s book on .......
News 5 October 2021
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CRT crush
Mayer Brown working with 'many' imminent issuers
Mayer Brown is currently working on “many” US private label capital relief trades which will “come to fruition” in the near future, according to partner Carol Hitselberger. She was speaking yesterday (4 October) at the Structured Finance Association (SFA) annual conference in Las Vegas.
Two US regionals – Texas Capital Bank and Western Alliance Bancorporation – have issued .......
News Analysis 5 October 2021
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CIFC, TRS launch leveraged loan partnership
Sector developments and company hires
CIFC, TRS launch leveraged loan partnership
Market Moves 4 October 2021
Teacher Retirement System of Texas (TRS) and CIFC Asset Management have established a new leveraged loan investment fund platform known as Texas Debt Capital (TDC). A CIFC affiliate is the general partner and investment manager of TDC, while TRS is the anchor investor limited partner and has committed significant equity to the fund. The .......
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Capitalising Mobility-as-a-Service
SDG Investments partner Stefan Bund and senior structurer To...
The trade-off between urbanisation, individualisation and sustainability has led to the emergence of new business models around individual and micro-mobility. New mobility providers enter the market and shape the urban landscape with their cars, mopeds, bicycles and scooters.
To cover the associated capital requirements, they need financing solutions that are as sustainable as the business models themselves. This offers the .......
Talking Point 4 October 2021
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Libor risks
Securitized products with swaps at most risk when Libor dies
While the potential damage to US securitized markets inflicted by the abolition of Libor appears less than seemed likely only a few months ago, pockets of concern remain, say credit analysts.
Deals which include swaps, particularly cross currency swaps, are most vulnerable. Any interest rate swap incorporates a floating rate leg indexed against Libor, while a dollar versus yen cross currency swap, .......
News Analysis 1 October 2021
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Lack of clarity
Positive signs for Indian ABS, but challenges remain
The Indian ABS market has demonstrated resilience during the Covid-19 pandemic. However, going forward, the lack of a central data depository and secondary market poses challenges to the growth of securitisation in this jurisdiction.
“The Indian securitisation market has crossed 30 years of existence – since then we have come a long way. The Indian market has grown .......
News 1 October 2021
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Synthetic Libor settings confirmed
Sector developments and company hires
Synthetic Libor settings confirmed
Market Moves 29 September 2021
The UK FCA has confirmed that to avoid disruption to legacy contracts that reference the one-, three- and six-month sterling and Japanese yen Libor settings, it will require ICE Benchmark Administration to publish these settings under a 'synthetic' methodology, based on term risk-free rates, for the duration of 2022. However, these six Libor settings will be .......
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Mobilising capital
Call for risk transfer adoption in development finance
Aid agencies, development finance institutions (DFIs) and multilateral development banks (MDBs) must make development finance work harder to achieve impact, according to a new OECD policy briefing. Entitled ‘Making blended finance work for sustainable development: the role of risk transfer mechanisms’, the report calls for the adoption of portfolio approaches that connect large-scale commercial finance supply with small-scale borrower .......
News 28 September 2021
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Fraud charges for Honor Finance pair
Sector developments and company hires
Fraud charges for Honor Finance pair
Market Moves 24 September 2021
The US SEC has announced fraud charges against James Collins and Robert DiMeo, the former principals of Honor Finance, for misleading investors about the subprime automobile loans that backed its US$100m offering. The SEC's complaint, filed in US District Court for the Northern District of Illinois, alleges that the pair were responsible for false .......
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Excellent shape
European ABS/MBS market update
September is living up to its reputation as a busy month for the European ABS/MBS primary market. Even though four deals are due to price today and tomorrow and three printed yesterday spreads remain tight and demand is still strong.
“It’s pleasing to see that the primary ABS market is in excellent shape,” notes one trader. “Although there is an .......
News 23 September 2021
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New frontiers?
Prospects for further NPL ABS guarantee schemes weighed
Given the success of both GACS and HAPS in facilitating the development of a market for non-performing loans, and consequently bank deleveraging, could similar government-backed measures emerge in other European jurisdictions? This Premium Content article examines the prospects for the introduction of further national guarantee schemes.
Italy and Greece appear to have embraced the most efficient model for de-risking ......
News Analysis 23 September 2021Premium Content
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US CLOs, Trups CDOs under observation
Sector developments and company hires
US CLOs, Trups CDOs under observation
Market Moves 22 September 2021
Fitch has placed 102 tranches issued by 43 US CLOs and 13 tranches issued by seven Trups CDOs under criteria observation (UCO), following the publication of its CLO and corporate CDO rating criteria last week (SCI 17 September). The agency intends to resolve the UCO status by applying the updated criteria to each .......