ABS
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Tighter pricing
Latest Elvetia trade completed
Credit Suisse has completed a Swiss corporate and SME significant risk transfer trade from its Elvetia programme, dubbed Elvetia Finance Series 2018-6. The trade printed at tighter levels compared to previous Elvetia corporate and SME deals, due to wide syndication. The transaction was completed under the new securitisation framework, which stipulates thicker tranches and was also a driver of the ......
News 30 November 2018Premium Content
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Tough approach
PRA guidance puts UK CRT issuers at a disadvantage
The UK PRA’s latest significant risk transfer guidance is putting UK capital relief trade issuers at a disadvantage compared to their European peers, mainly due to the regulation’s provisions on excess spread and the capital treatment of standardised portfolio transactions. The regulation is broadly in line with a consultation from May that sparked a market backlash (SCI .......
News Analysis 30 November 2018
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Funding boost for online lender
Sector developments and company hires
Alesco CDOs transferred
The collateral management agreements for the Alesco Preferred Funding X to XVII Trups CDOs have been assigned to Hildene Collateral Management Company (HCMC), an affiliate of Hildene Capital Management. Under the terms of the assignments, HCMC agrees to assume all the responsibilities, duties and obligations of the current collateral manager (ATP Management) under the agreements and under .......
Market Moves 29 November 2018
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Basel 4 impact will 'vary massively'
Regulatory changes represent 'complete overhaul'
Regulatory changes coming into effect next year will have a major impact on the way European banks calculate risk weighted assets (RWAs), resulting in a greater incentive for some banks to utilise risk transfer mechanisms. However, it is expected that a nuanced picture will emerge, with regulatory changes impacting banks’ RWA calculations differently depending on a range of factors, such .......
News Analysis 29 November 2018
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Term leveraging
European ABS market update
The European primary ABS market is still drifting wider, due to concentration of supply.
“Investors are using their leverage to dictate terms and push deals as wide as possible. That’s one of the reasons why the pipeline has been brought forward,” says one trader.
He adds: “If a deal is struggling, an investor can offer to push .......
Market Reports 29 November 2018
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Timing issues
European ABS market update
The two-year senior notes of Compass Banca’s €900m Quarzo Series 2018 consumer ABS are being talked at three-month Euribor plus 95bp. However, the transaction is not considered to be well-timed, as Italian spreads continue to widen.
“The deal is attractive, but not compared with the yield on Italian government paper,” says a trader. “It makes no sense to ......
Market Reports 28 November 2018Premium Content
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Tax credits eyed
Second Greek NPL ABS proposal unveiled
The Bank of Greece has unveiled a securitisation scheme backed by its deferred tax credits (DTCs) that aims to reduce the country’s large non-performing loan stockpile. The plan is seen as a positive development, with any move to introduce a government guarantee on the senior tranches expected to raise the prospects of its success.
The proposed scheme envisages .......
News Analysis 27 November 2018
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Canadian asset expansion
Sector developments and company hires
ILS
TigerRisk Partners has hired Stephen Fromm as vice chairman of TigerRisk capital markets and advisory. In his new role, Fromm will act as a senior investment banker focusing on insurance industry M&A, capital raising and strategic advice. Fromm was previously md and vice chairman of financial institutions investment banking at Deutsche Bank.
MBS purchase plans
The Bank of Canada .......
Market Moves 27 November 2018
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Italian RMBS sell-off 'unlikely'
Uncertainty ahead may see pan-European issuance drop
A widespread sell-off of Italian RMBS is ‘unlikely’, despite a recent comment from a UK investment manager that there is no longer a case for investing in Italian RMBS now spreads are trading within Italian government bonds. The statement, from 24 Asset Management (24AM), adds that Dutch and UK RMBS are now a more sensible option, although some investors question .......
News Analysis 26 November 2018
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Start the week - 26 November
A review of securitisation activity over the past seven days
Market commentary
US CLO equity and double-B bonds were casualties of last week’s drop in the S&P 500 index, with bids softening across the secondary market (SCI 21 November).
“A handful of CLO equity and double-B bonds were out for the bid and did not trade,” said a trader. “There was some clear hesitation in the market compared with a week ago. .......
News 26 November 2018
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UK SLABS slated
Sector developments and company hires
EMEA
Eurocastle Investment has appointed Hammad Khan to its board as a non-executive director, increasing its number of directors to six. Khan is a representative of Eurocastle’s largest shareholder, an affiliate of EJF Capital, where he is a senior md and a senior member of the EJF Investments Manager investment team. He joined EJF in March 2013 and is responsible .......
Market Moves 23 November 2018
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Risk transfer round-up - 23 November
CRT sector developments and deal news
Credit Suisse is believed to be pricing a risk transfer transaction from its Elvetia programme on Monday. The issuer’s last Elvetia transaction was a Sfr300m ticket referencing a Sfr5bn portfolio (see SCI’s capital relief trades database).
Further details have also emerged regarding the pricing of Standard Chartered’s trade finance transaction, Sealane 4 (SCI 14 November). The ......
News 23 November 2018Premium Content
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Sweet spot
Multi-arrangement ILS vehicle debuts
Brit has launched Sussex Capital UK, the first vehicle to be given permission by the PRA under the UK’s new ILS regime to write general collateralised reinsurance for multiple cedants. The SPV’s multi-arrangement designation enables the vehicle to write a broad range of reinsurance contracts, each written by a different cell but using approved template documents and therefore only .......
News 23 November 2018
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Financial frontier
UAE poised for securitisation growth
The United Arab Emirates continues to ameliorate investment concerns by introducing new legislation and addressing issues presented by Sharia finance. In an amendment released on 12 November, the government abolished limited liability companies in the Dubai International Financial Centre (DIFC) and introduced new categories of public and private companies as part of a broader initiative in line with international best practices, providing a suitable regulatory framework and creating greater certainty and flexibility for ......
News Analysis 22 November 2018Premium Content
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Classification clarity
Spanish SME ABS 'first' marketing
Be-Spoke Capital is marketing an unusual, inaugural securitisation, backed by a portfolio of loans to Spanish SMEs and expected to total around €300m, with pricing targeted for early December. Dubbed Alhambra SME Funding 2018-1, Natwest Markets is sole arranger on the transaction while the European Investment Bank is looking to invest €80m in the mezzanine tranche.
Miles Hunt, head of securitised .......
News Analysis 21 November 2018
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CRT tranche downgraded
Sector developments and company hires
Acquisitions
Spruce Finance has been acquired by HPS Investment Partners. Spruce will be headquartered in Houston and maintain its executive and M&A offices in San Francisco. Christian Fong has joined the company as president and ceo after holding a position as co-chairman of the board of directors since early 2017. The transaction took place through Spruce Holdings, a .......
Market Moves 21 November 2018
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Bloodbath blues
European ABS market update
The European ABS market has repriced, after taking a hit yesterday when the S&P 500 index plunged by 1.8%. The tone has improved this morning, as traders cautiously return to the market.
“We’re seeing the market repricing after the bloodbath that happened yesterday,” says one trader. “A lot of paper hit the shelf and nobody wanted to trade it; mezz ......
Market Reports 21 November 2018Premium Content
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Tougher approach
KNF stance puts Polish securitisation on hold
The future of securitisation and closed-end securitisation funds in Poland remains uncertain, following the Polish financial supervisory authority’s (KNF) approximately PLN6.4m (€1.49m) fine against Raiffeisen Polska in September. KNF fined the Austrian bank over its alleged failure in safeguarding securitisation fund assets as a depository bank in securitisation transactions, citing an incomplete register and lack of awareness over the .......
News Analysis 21 November 2018
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Long goodbye
First non-Libor linked ABS anticipated
Lloyds became the first bank to issue a benchmark covered bond tied to the sterling overnight index average (SONIA) in September. The move has sparked predictions that the first securitisations tied to alternative reference rates will emerge next year.
Libor is set to be phased out from 2021 and it remains unclear what will replace it as a .......
News Analysis 20 November 2018
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Credit clutch
European ABS market update
The European ABS slow-down continues, with prices drifting wider and subdued credit growth across the board. In particular, an aversion to duration risk has emerged this week.
“Credit is headed for the worst year since 2008,” one trader explains. “ABS traders are not used to showing negative figures to their clients. People are reassessing the market.”
In .......
Market Reports 20 November 2018
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Fixed income head hired
Company hires and sector developments in structured finance
Newmark Group has established an operating committee consisting of key senior managers following the spin-off from BGC announced on the 13 November. The operating committee members are as follows: Lou Alvarado, chief revenue officer, previously senior md at Cushman & Wakefield; Raj Bhatti, cio, previous partner at Kinetix Trading Solutions; Jeff Day, president and head of multifamily capital .......
Market Moves 19 November 2018