Complete news archive

  • Pandemic hedges

    CRT solutions for pandemic events mulled

    Munich Re’s Epidemic Risk Solutions (ERS) unit is targeting credit risk transfer solutions that incorporate pandemic events, although the initiative remains in its early stages and coverage will for now amount to only an economic hedge without capital benefit.

    The latter is currently not available to banks under existing Basel rules, but this could change as the ESG agenda across credit markets .......

    News 4 June 2021

  • Positive prospects

    Italian NPL ABS growth pending

    Italy’s NPL market remained busy last year despite Covid-related uncertainty, and investor demand for Italian NPL sales and securitisations is expected to persist this year as the economy recovers.

    Italian banks' non-performing loans (NPLs) fell to 4.1% of their gross loans in December 2020 from 6.7% a year earlier, down materially from a peak of 17% in 2015, according to .......

    News Analysis 4 June 2021

  • Capital cushions

    Buoyant CET1 levels explain CRT reluctance

    Dealers agree that this year has been quieter in the CRT market in USA and Canada than had been anticipated - with the honourable exception of the ground-breaking Texas Capital Bank deal in March.

    “It is a very strange time. It feels like a lot of banks are on the sidelines,” says a source in the US.

    The renaissance of the North .......

    News Analysis 3 June 2021

  • FHFA under fire

    Arch takes aim at FHFA report on GSE CRT

    David Gansberg, president and ceo of Arch Mortgage Insurance, has taken serious issue with the recent Federal Home Financing Authority (FHFA)’s report on the GSE CRT programme, published last month.

    Writing in Housing Wire last week, Gansberg accuses the FHFA of missing out vital evidence on the CRT scheme to present a distorted picture of its efficacy.

    The FHFA report, titled Performance of .......

    News 3 June 2021

  • Canuck rumours

    Canadian banks said to be circling CRT

    Rumours continue to swirl about the possibility of an imminent regulatory capital relief trade issued by a Canadian bank.

    In January, there were strong rumours that a CRT trade was in the offing in the near future, probably from Scotia. These rumours have recently resurfaced, though as yet nothing has come to light. It was thought originally that Scotia would issue .......

    News 3 June 2021

  • Risk transfer round up-3 June

    CRT sector developments and deal news

    Sabadell is believed to be prepping a capital relief trade backed by SME loans that is expected to close in 3Q21. The bank’s last significant risk transfer trade was finalized in June 2020 (see SCI’s capital relief trades database).  

    .......

    News 3 June 2021

  • Domi debut

    Domivest transaction attracts strong investor appetite

    The debut STS-compliant buy-to-let (BTL) RMBS transaction, issued by Dutch lender Domivest and dubbed Domi 2021-1, has now closed and the transaction saw significant demand across the capital structure and also from new investors, according to the borrower.

    Investor response to the transaction demonstrates the validity of the structure and the market is likely to see more of it in the future, suggests .......

    News 2 June 2021

  • Private debt investors doubt ability to handle defaults in post-pandemic downturn

    Contributed thought leadership by Ocorian

    An overwhelming majority (87%) of capital markets investors are pursuing direct lending strategies, though almost half (47%) lack confidence in their ability to manage loss recoveries, which could have serious implications if corporate defaults rise as pandemic-driven government support schemes are withdrawn. This is according to a new Ocorian report, entitled ‘Navigating CovExit: searching for value in the debt markets’, which .......

    Talking Point 1 June 2021

  • True lending truth

    Senate vote to reject True Lender will not affect loan securitizations

    Denounced as a brake upon consumer lending, the recent Senate vote to strike down the so-called ‘True Lender Rule’ is a storm in a teacup, say lawyers.

    The rule had only become effective in December 2020 and had been the subject of state attorney general (AG) challenges from the outset, they point out. Moreover, the great bulk of loans that found their .......

    News Analysis 28 May 2021

  • ETL waiver requested following cyberattack

    Sector developments and company hires

    ETL waiver requested following cyberattack
    European truck lease provider Fraikin SAS was subject to a ransomware attack that started on 11 May. S&P notes that the credit quality of its two securitisations - FCT Eurotruck Lease II and FCT Eurotruck Lease III (ETL II and III) - is unlikely to be affected, providing the company can make a swift return .......

    Market Moves 28 May 2021

  • Moving forward

    Positive consumer sentiment emerging post-pandemic

    As the European securitisation market moves beyond the coronavirus crisis, an overall positive picture appears to be emerging. However, the withdrawal of governmental support measures remains a risk for many jurisdictions in the region.  

    “As we came out of the financial crisis in 2009, lending was picking up, both net and gross levels. The pandemic hit and there .......

    News 28 May 2021

  • End of the line?

    SRT issuers mull dropping synthetic excess spread

    The requirement to fully capitalise synthetic excess spread is expected to result in SRT issuers dropping the feature from their transactions. This CRT Premium Content article weighs the relative benefits of synthetic securitisations versus those of full-stack cash deals, in which originators can use excess spread.

    The EBA and the European Commission’s decision last year to fully capitalise synthetic ......

    News Analysis 28 May 2021

    Premium Content

  • CRT return for FNMA?

    Supreme Court ruling on Calabria's future imminent

    A US Supreme Court decision about whether President Biden can remove Mark Calabria as director of the Federal Housing Finance Authority (FHFA) may arrive as soon as next week, say well-placed sources.

    Following recent precedent, it seems likely that the court will rule that Calabria can be removed by the executive ‘for cause’. This will have profound ramifications .......

    News Analysis 27 May 2021

  • CLO manager ESG policies polled

    Sector developments and company hires

    CLO manager ESG policies polled
    A recent survey conducted by Fitch shows that 84% of the 117 CLO managers it polled have a stated ESG policy, while 60% are part of an organisation that is a signatory to the United Nations Principles for Responsible Investment (UNPRI). Managers reported generally sparse ESG information for leveraged loan issuers, but some responses highlighted .......

    Market Moves 27 May 2021

  • Landmark SRTs finalised

    Cash collateralised insurer deals debut

    Credit Risk Transfer Solutions (CRTS) has executed three synthetic securitisations that have broken new ground in the market. Indeed, the firm has structured the first cash collateralised capital relief trades that involve insurer counterparties.

    According to Andy Garston, director at CRTS: ‘’Most SRT deals require cash investors, which is problematic for insurers. But we now have a structure .......

    News Analysis 27 May 2021

  • Missed opportunity

    ESA report disappoints on securitisation treatment

    The recent European Supervisory Authorities (ESA) report on the implementation and functioning of the EU Securitisation Regulation (SCI 17 May) disappointed many in the industry, since it avoided tackling long-standing issues in the treatment of securitisations. In particular, the lack of a level playing field in terms of disclosure and due diligence remains a concern.

    The ESA .......

    News Analysis 27 May 2021

  • Focal point

    Arb rather than NAV in focus

    European CLO equity performance has held strong despite the unprecedented Covid shock and significant shifts in loan market pricing in the last 12 months, supporting the view that a diversified portfolio of CLO equity can deliver strong and consistent returns through the credit cycle and attract new investors. To build on that, CLO managers now need to shift their focus, .......

    News 25 May 2021

  • Actuarial approach

    Alphidem co-founder Ken Sutter outlines how the quantitative...

    In light of the current regulatory and interest rate environment, it could be assumed that capital relief trades enjoy great popularity, even outside of the dedicated investor community. However, despite growth and positive market trends, the asset class still leads a niche existence and sticks to its esoteric label. This is even more astonishing considering that many alternative credit managers .......

    Talking Point 25 May 2021

  • CLO conflicts of interest eyed

    Sector developments and company hires

    CLO conflicts of interest eyed
    IOSCO has issued four questionnaires for industry participants on conduct risks in leveraged loans (LLs) and CLOs targeting bank lenders, CLO investors, CLO managers and LL sponsors. Through its Committee 3 on Regulation of Market Intermediaries and its Committee 5 on Investment Management, IOSCO is conducting work to understand the potential conflicts of interest and .......

    Market Moves 24 May 2021

  • Climate risks disclosed

    EBA publishes landmark banking study

    The EBA has published the first EU-wide pilot exercise on climate risk for the banking sector. The exercise shows that over half of banks’ exposures are allocated to sectors that might be sensitive to climate transition risk. However, the study qualifies that limited data availability and reliability can affect results in terms of comparability.  

    The revised CRR/CRD .......

    News 24 May 2021

  • SCI Start the Week - 24 May

    A review of securitisation activity over the past seven days

    Last week's stories
    Gaining momentum
    European solar ABS issuance tipped to emerge
    Revving up
    Strong demand continues for CRE CLOs
    SRT boost
    Barclays expands Colonnade platform

    Other deal-related news

    • OneMain has become the first US securitisation issuer to offer a SOFR-linked floating-rate tranche (SCI 17 May).
    • US CMBS loan refinancings are likely to remain under pressure over the next 18 months, given continued business interruption at .......

      News 24 May 2021
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