ABS

  • Offshore investment in Chinese ABS soars

    Investors find relative value in second largest ABS market

    Foreign investment in the Chinese ABS market is increasing exponentially, as routes to entry have been eased by developments such as the Bond Connect platform and the presence of ratings from international agencies. With issuance volumes in 2018 of around US$300bn, China is now the second largest global ABS market after the US and is seeing a broadening range of deals  which .......

    News Analysis 22 July 2019

  • Co-ceo named

    Sector developments and company hires

    Co-ceo named

    Värde Partners has named Ilfryn Carstairs as co-ceo, alongside co-founder George Hicks, effective from 1 January 2020. Hicks intends to transition to an executive chair role in 2022. Carstairs will retain his role as partner and global cio, overseeing the firm’s global investment strategy and co-chairing its investment committee. Based in Singapore since 2017, he joined Värde Partners .......

    Market Moves 19 July 2019

  • Squaring the circle

    CRT issuers struggling with borrower anonymity

    Capital relief trade issuers are attempting to anonymise loan-by-loan data in transactions, while simultaneously complying with ESMA’s requirement to disclose such data as part of the new securitisation regulation (SCI 22 February). Market participants are concerned that unless regulators address this tension, it could cause a breach of confidentiality provisions.

    According to one legal expert: “The problem is more .......

    News Analysis 19 July 2019

  • Secondary pick-up?

    Aircraft ABS E-notes proliferate, despite residual value risks

    Equity participation in aircraft ABS is picking up, following the execution of transactions with broadly syndicated E-notes, aimed at creating a liquid secondary market. However, the market may be underestimating residual value risk.  

    Aircraft equity notes have historically been an illiquid investment, with only the senior ABS tranches broadly offered to investors. “Residual value is important for .......

    News Analysis 19 July 2019

  • Risk transfer round-up - 19 July

    CRT sector developments and deal news

    Monte dei Paschi di Siena is rumoured to be prepping an Italian SME significant risk transfer transaction for 4Q19. The securitisation would be the lender’s first capital relief trade.

    .......

    News 19 July 2019

  • Operational issues

    CRT key steps outlined

    The operational issues involved in prepping a risk transfer transaction are often overlooked. Indeed, three key steps should be in place before a bank considers executing a capital relief trade.

    “Each department of a bank – whether it’s the front, middle or back office – naturally tends to run its own individual processes and prioritise its own responsibilities; .......

    News Analysis 19 July 2019

  • Czech mate

    SME CRT inked

    The EIB, the EIF and Česká spořitelna (ČS) have inked a capital relief trade. The synthetic securitisation will channel €306m of new financing into SME businesses in the Czech Republic.

    Backed by the European Fund for Strategic Investments, the transaction features a €76.5m mezzanine guarantee to cover potential losses on an existing portfolio of around €1bn SME and .......

    News 18 July 2019

  • Additional resources for disclosure published

    Sector developments and company hires

    Agri-investing appointment

    Arable Capital Partners has appointed Matt Reus a vp in the Bellevue, Washington office. He is responsible for transactional work and due diligence on acquisitions, financial analysis, portfolio management and assisting in overall investment strategy. Reus has 12 years of direct investment, investment banking and fixed income experience, including with securitisation transactions. He was previously with Cascadia Capital .......

    Market Moves 18 July 2019

  • Bank fined over MBS trading failures

    Company hires and sector developments

    Agency heads announced

    Morningstar Credit Ratings (MCR) has named Erin Stafford as head of the combined DBRS/MCR North American CMBS group and Quincy Tang as head of the combined US RMBS group, having both served in similar positions at DBRS. The pair will report to Claire Mezzanotte, who will be the head of global structured finance following the .......

    Market Moves 17 July 2019

  • Growth phase

    Debut trade receivables deal launched, expansion eyed

    Stenn International has launched a debut US$200m securitisation with Natixis, backed by international trade finance receivables. The deal looks set to be the first of many, as the firm intends to become a programmatic ABS issuer while also expanding into back-up servicing and IFRS 10 derecognition services.

    In June this year, the firm hired Chris Rigby to the newly .......

    News Analysis 17 July 2019

  • Fund founder guilty of fraud

    Company hires and sector developments

    African solar plan approved

    The African Development Bank Group has approved an innovative multinational financing programme for Distributed Energy Service Companies (DESCOs), which would see 900,000 households in sub-Saharan Africa – about 4.5 million people - gain access to solar power by 2025.

    The DESCOs Financing Program promotes securitisation financing techniques to address barriers to accessing finance for DESCOs, while .......

    Market Moves 15 July 2019

  • Green investment partnership launched

    Company hires and sector developments

    Green investment

    Amundi and the EIB have signed a partnership to launch the Green Credit Continuum investment programme, which is designed to foster the development of the green debt market beyond the existing green bonds, supporting small-scale green projects and financing SMEs and mid-caps. The agreement has three components: a diversified fund will invest in green high yield corporate bonds, .......

    News 12 July 2019

  • Pros and cons

    STS conversion benefits weighed

    The incentives for converting pre-2019 securitisations into STS-compliant deals differ across sellers. But conversion may also have negatives for investors in such transactions, depending on how it’s achieved.

    The focus on STS so far has been on new transactions, with more than a dozen compliant transactions launched in the primary market over the last few months, including four .......

    News Analysis 12 July 2019

  • Mixed bag

    Hybrid M&A, ABS transactions on the rise

    Following the financial crisis, a growing number of financial assets have fallen into the hands of non-banks, which has led to a growing number of M&A transactions that feature securitisation and whole loan elements. These multi-faceted, hybrid deals “increase the complexity” of financial transactions and often necessitate advisors equally well-versed in M&A and ABS law to translate for parties on .......

    News Analysis 11 July 2019

  • Risk transfer round-up - 11 July

    CRT sector developments and deal news

    Standard Chartered is believed to be readying a corporate capital relief trade that is expected to close this month. The bank’s last risk transfer transaction was completed in June and is a US$90m CLN called Chakra 3, which references a US$1bn portfolio of corporate revolvers (SCI 21 June). Additionally, Societe Generale is rumoured to be closing an SME .......

    News 11 July 2019

  • Novel approach

    UTPs drive ReoCo rethink

    Investors and servicers in the Italian non-performing loan market are targeting a new approach to ReoCos as they eye the coming unlikely-to-pay (UTP) wave. Such an approach requires capabilities whose development remains a work in progress, however.

    ReoCos are SPVs that have typically been used in the Italian market to buy and auction real estate collateral. However, servicers .......

    News Analysis 11 July 2019

  • Investment chief appointed

    Sector developments and company hires

    Business Mortgage Finance 6 update

    Business Mortgage Finance 6, the issuer, has informed noteholders that on 4 July 2019 it issued a claim against the Issuer issued a claim against the following defendants in the High Court of Justice in London: Greencoat Investments, Greencoat Holdings Limited, Portfolio Logistics Limited, Alfred Oyekoya, Patrick FitzSimons and Maria Stoica. The claim seeks declarations .......

    Market Moves 10 July 2019

  • Renewable debut

    Green ABS could be first of many

    Glennmont Partners has sponsored a debut securitisation backed by a portfolio of project finance loans tied to Italian renewable energy plants. It is hoped that the €51.472m transaction, structured and arranged by Natixis, will act as a catalyst for further securitisations of renewable energy assets.

    The issuance comprises a €41.830m class A floating rate note and a €9.642m class B note, also floating .......

    News 10 July 2019

  • New deals surge

    Quarterly SCI data update

    2Q19 saw a surge in new issuance volume across securitisation markets either side of the Atlantic. The second quarter typically sees an uptick over the previous quarter (SCI 11 April 2019), but this year's boost in European volumes was a reflection of greater regulatory certainty as the new STS rules bedded in and pent-up supply met pent-up demand.

    .......

    News Analysis 10 July 2019

  • Spanish exposure

    Rare NPL RMBS prepped

    Rarely seen Spanish assets are behind the latest non-performing loan RMBS currently marketing. At the same time, price talk is out on the latest Irish NPL RMBS.

    The dual-tranche Spanish deal, dubbed ProSil Acquisition, is backed by a €494.7m by gross book value (GBV) portfolio consisting of mostly secured non-performing loans and some residual unsecured loans. The receivables were originated .......

    News 10 July 2019

  • SRT trio

    Santander expands SME foothold

    Santander has completed three SME significant risk transfer transactions that total €940.6m of tranche notional. This represents Santander’s largest total annual SME synthetic securitisation placement to date (see SCI’s capital relief trades database).

    Jeremy Hermant, structurer at Santander, notes: “We continue to grow our SME issuance, while keeping the size of the balance sheet and the CET1 .......

    News 9 July 2019
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