Complete news archive

  • Execution risks?

    Hertz performance metrics improving

    Although Hertz Corporation’s interim settlement with investors holding Hertz Vehicle Financing II ABS notes (SCI 27 July) is “a step in the right direction”, Fitch believes the company still faces notable execution risks, due to ongoing coronavirus impact on the rental car sector and a challenging operating environment. The settlement consequently has no impact on the agency’s ratings .......

    News 31 July 2020

  • AGs fight Madden rule

    Sector developments and company hires

    AGs fight Madden rule
    The attorneys general of California, Illinois and New York have filed a suit against the OCC’s ‘valid when made’ rule (SCI 1 June), which they claim would allow the federal government to pre-empt state usury laws and allow third-party entities “to prey on vulnerable” borrowers. The AGs note that the ability to pre-empt state usury .......

    Market Moves 30 July 2020

  • Blockchain boost

    DLT opportunity for ABS market

    Coronavirus-related concerns are boosting the use of technology within the securitisation market. Blockchain is one area that is benefiting from this trend.

    John Evans, Vanguard’s head of blockchain strategy, says: “One area we feel that there is a good opportunity to modernise the plumbing of the markets is in the securitisation market, and ABS is a good example .......

    News Analysis 30 July 2020

  • Lag lustre

    Slower recovery in CLOs provides advantages and opportunities

    Secondary CLO trading desks either side of the Atlantic are reporting greater re-engagement from the buy-side, which is helping to support prices. However, such support appears to be insufficient to prevent the CLO market lagging the recoveries seen elsewhere.

    “CLOs have underperformed equity and other credit markets,” concedes Miguel Ramos Fuentenebro, co-founder of Fair Oaks Capital. “But in my view, .......

    News Analysis 30 July 2020

  • CLO ETF prepped

    Sector developments and company hires

    CLO ETF prepped
    Janus Henderson Investors has filed a preliminary registration statement with the US SEC in connection with the Janus Henderson AAA CLO ETF (JAAA), which is expected to launch on 22 October and will be offered to US investors. The fund will be managed by portfolio managers John Kerschner and Nick Childs, while Jessica Shill will serve as .......

    Market Moves 29 July 2020

  • STACR surge

    Freddie Mac galvanizes CRT re-opening with another STACR transaction

    Freddie Mac has printed its second post-lockdown STACR deal, three weeks after re-opening the CRT debt market, with an upsized four-tranche $835m transaction. The deal was priced at the end of last week, confirmed a Freddie Mac spokesperson.

    The offering, designated STACR 2020-HQA3, consisted of a M1 tranche priced at one-month Libor plus 155bp, an M2 tranche at one-month Libor plus 360bp, .......

    News 29 July 2020

  • SRT boost

    BMO launches capital relief trade

    Bank of Montreal (BMO) has completed a five-year financial guarantee that references US and Canadian senior secured and senior unsecured corporate loans. Dubbed Manitoulin Muskoka series 2020-2, the transaction is the bank’s third significant risk transfer deal this year. All three trades bring BMO’s total SRT tranche notional issuance so far in 2020 to US$494m, the Canadian lender’s largest .......

    News 29 July 2020

  • ILS issuance remains resilient

    Sector developments and company hires

    ILS issuance remains resilient
    US$2.8bn of property catastrophe bond limit was placed in 2Q20, bringing the total issued year-to-date to US$6.5bn, according to Aon Securities’ latest ILS Update report. In comparison, 2019 saw a total of US$5.4bn in property cat bond limit placed for the entire year. The total amount of property cat bonds outstanding is marginally down on 2019 .......

    Market Moves 28 July 2020

  • CLO equity defies predictions

    Sector developments and company hires

    CLO equity defies predictions
    US CLO equity cashflow performance is defying pessimistic predictions, according to a new report from JPMorgan CLO research analysts. As of 23 July reporting, US CLO equity on average paid 8% cashflow year to date (based on 842 tranches or circa 70% of the universe) and the report estimates 89% of equity is paying, compared to .......

    Market Moves 27 July 2020

  • 'Switch' success

    Aussie non-bank issuance on the rise

    The Australian securitisation market has seen a rise in non-bank issuance post-coronavirus. Such activity has benefited from an adjustment to the AOFM’s Structured Finance Support Fund (SFSF) that funnelled secondary sellers into new primary deals.

    Martin Jacques, director, head of securitisation and covered bond strategy at Westpac Institutional Bank, says: “Since the onset of the pandemic, all of .......

    News Analysis 27 July 2020

  • SCI Start the Week - 27 July

    A review of securitisation activity over the past seven days

    Last week's stories
    Carrots and sticks
    'Wide-ranging and ambitious' recommendations welcomed
    Funding diversity
    Non-bank lending 'credit neutral' for SME ABS
    Green shoots
    US middle market CLOs showing signs of recovery
    Issuance boost
    Full-stack SRTs unlocked
    Italian trades inked
    Unicredit completes NPL pair
    Positive pick-up
    European ABS market update
    Qualitative approach?
    Covid complicating CRT analytical processes
    Support network
    US CLO prices supported by a variety of factors

    Other deal-related .......

    News 27 July 2020

  • 'Quick fix' for NPE, synthetic securitisation

    Sector developments and company hires

    ‘Quick fix’ for NPE, synthetic securitisation
    The European Commission has adopted a capital markets recovery package, as part of its overall coronavirus recovery strategy. The measures aim to make it easier for capital markets to support European businesses to recover from the crisis via targeted changes to capital market rules.

    Building on recent work by the EBA, the proposals .......

    Market Moves 24 July 2020

  • Funding diversity

    Non-bank lending 'credit neutral' for SME ABS

    Moody’s suggests that the emergence of non-bank lenders – such as Paypal, Amazon and Klarna – in Europe is credit neutral for SME securitisations because although they broaden funding sources, this is at the expense of increasing borrowers’ overall debt burden. Additionally, while technology-driven underwriting facilitates quick credit decisions and transparency, the use of alternative data is relatively untested .......

    News 24 July 2020

  • Qualitative approach?

    Covid complicating CRT analytical processes

    The Covid-19 fallout has complicated further the analytical process in connection with capital relief trades, given that the pandemic is having a skewed impact on different sectors of the economy. Against this backdrop, qualitative modelling approaches are gaining traction.

    Whether a CRT issuer uses EBA, CCAR or their own internal scenarios, the impact of Covid-19 on stress tests .......

    News Analysis 24 July 2020

  • Issuance boost

    Full-stack SRTs unlocked

    BBVA and Santander have reopened the full-stack significant risk transfer market with the issuance of an auto ABS apiece in June and July respectively. However, full-stack securitisations widely syndicated to private investors and referencing Northern European exposures remain to be seen post-coronavirus. Consequently, arrangers are looking to Chenavari’s recently priced Aurorus 2020 consumer ABS for guidance (SCI 21 July).

    News Analysis 24 July 2020

  • Italian trades inked

    Unicredit completes NPL pair

    Unicredit has sold two predominantly unsecured SME non-performing loan portfolios for a total of €1.54bn. The move comes as Italian banks step up their loan loss provisions to cover an anticipated rise in NPLs following the coronavirus crisis.

    The first batch of Unicredit NPLs was sold to Banca Ifis, Guber and Barclays for €840m, with Guber and Barclays .......

    News 23 July 2020

  • ReoCo restructuring in the works

    Sector developments and company hires

    ReoCo restructuring in the works
    The Leviticus SPV issuer is set to implement a ReoCo structure, having appointed Credito Fondiario as the servicer to carry out all core ReoCo activities. The main purpose of the ReoCo is to encourage third-party acquisitions at auctions above auction base prices or to repossess real estate assets at otherwise empty auctions and re-sell them .......

    Market Moves 23 July 2020

  • Green shoots

    US middle market CLOs showing signs of recovery

    As the broader CLO market sees increasingly significant levels of new issuance, middle market CLOs are also starting to see the green shoots of recovery. However, the sector still faces its own unique challenges, while providing some opportunities as well.

    New middle market CLO deals have begun to reappear and the latest of which, Owl Rock’s US$440m Parliament .......

    News Analysis 22 July 2020

  • Canadian CMBS forbearance highlighted

    Sector developments and company hires

    Canadian CMBS forbearance highlighted
    As of the June 2020 remittance reports for the Canadian conduit CMBS sector, 48 loans totalling C$559.9m were on the servicer's watchlist for coronavirus-related relief, according to DBRS Morningstar. In most of these instances, the servicer’s commentary confirmed that borrowers were granted loan modifications and/or forbearances.

    The majority of these loans are secured by retail .......

    Market Moves 22 July 2020

  • Second CLN references WaMu loans

    Sector developments and company hires

    Second CLN references WaMu loans
    JPMorgan is in the market with its second public synthetic RMBS, Chase Mortgage Reference Notes 2020-CL1. Principal payments on the notes are based on the actual payments received and performance of a US$2bn reference pool consisting of 8,683 prime-quality residential mortgage loans. According to Fitch, the majority of the loans were originally negative amortisation loans originated .......

    Market Moves 21 July 2020

  • Positive pick-up

    European ABS market update

    The positive tone across the European securitisation market appears to be continuing this week, following one that saw rare Dutch consumer (Aurorus 2020) and Portuguese auto (Silk Finance No. 5) paper placed. Indeed, two more relatively rare mandates were announced yesterday (20 July) – a new UK prime RMBS master trust and the first post-coronavirus UK CMBS.

    One .......

    Market Reports 21 July 2020
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