Complete news archive
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Ladder locks in financing
Sector developments and company hires
Ladder locks in financing
Market Moves 5 May 2020
Ladder Capital has entered into a strategic financing arrangement with Koch Real Estate Investments, under which Koch will provide the company with approximately US$206.4m in senior secured financing to fund transitional and land loans. As part of the strategic financing agreement, Koch has the right to make a US$32m equity investment in the Ladder at any time .......
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Romanian SRT inked
Uncapped guarantee completed
The EIF and nine Romanian banks have completed an uncapped guarantee agreement from the SIUGI programme that covers 60% of a €1.368bn portfolio of Romanian SME credit rights. The banks originating the SME credit rights under this initiative are Banca Transilvania, Banca Comercial Romana, BRD – Group Societe Generale, ING Romania, ProCredit, Raiffeisen Bank Romania, Libra Internet Bank, UniCredit .......
News 5 May 2020
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Modifications up
MPL impairments bucking the trend
US marketplace loan payment impairment rates have increased amid the coronavirus fallout but remain below the changes in unemployment figures. Recent dv01 performance data also shows that modifications comprise over 70% of all payment impairments, thereby limiting near-term defaults.
Indeed, new modifications outnumber new delinquencies and dv01 expects this trend to continue. The majority of modifications are a .......
News 5 May 2020
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Ratings resilience
Shorter pro-rata periods to benefit SRTs
A sharp deterioration in asset performance due to the coronavirus fall-out may lead to sequential pay triggers in predominantly pro-rata paying significant risk transfer deals being breached earlier than initially assumed. Shortened pro-rata periods may, in turn, increase the resilience of note ratings to declining asset performance and the associated upward revision of default base cases.
As part .......
News 5 May 2020
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WAM guidelines finalised
Sector developments and company hires
WAM guidelines finalised
Market Moves 4 May 2020
The EBA has published its final guidelines on the determination of the weighted average maturity (WAM) of the contractual payments due under the tranche of a securitisation transaction, as laid down in the CRR. These guidelines aim at ensuring that the methodology applicable for the determination of the WAM for regulatory purposes is sufficiently transparent and harmonised .......
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SCI Start the Week - 4 May
A review of securitisation activity over the past seven days
Last week's stories
News 4 May 2020
Cautiousness prevails
European CLO market update
CRT vol aims for the stars
The US credit risk transfer market is at record-breaking volatility
De-risking deluge?
US CLO managers' initial crash response assessed
Growth phase
Asian infrastructure loans eyed
Home sales plunge
Over 20% drop in March homes sales bodes ill for MBS
Income slashed for Fannie and Freddie
Q1 results at the GSEs reflect .......
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On hold
Italian NPL ABS to pick up next year
Italian non-performing loan securitisations are anticipated to drop by 50%-70% this year, compared to 2019, as the Covid-19 fallout puts bank deleveraging plans on hold (SCI passim). However, NPL ABS issuance is expected to pick up next year.
According to Scope Ratings: “We do not expect Italian NPL securitisations to reach the levels of 2018-2019. Activity may increase .......
News 4 May 2020
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CRT vol aims for the stars
No longer staid and dependable, the CRT market is at record-breaking volatility
Despite a levelling out in April, volatility in the credit risk transfer market remains extremely elevated, particularly in the context of an asset class that hitherto has demonstrated very little volatility at all.
Annualised vol for the CRT sector was 13.06% at the end of April, according to data produced by Mark Fontanilla and Co, a Charlotte, North .......
News Analysis 2 May 2020
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Income slashed for Fannie and Freddie
Q1 results at the GSEs reflect Covid 19 carnage
Fannie Mae today (May 1) reported that profit plunged in Q1 2020 to $461m compared with $4.4bn in Q4 2019.
The GSE said that the decrease in net income was due to a shift from credit-related income to credit-related expense resulting from the “economic dislocation caused by the Covid 19 outbreak.”
It estimates that around 7% of .......
News 2 May 2020
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MBS overvaluation case settled
Sector developments and company hires
Overvaluation case settled
Market Moves 1 May 2020
The US SEC has accepted an offer of settlement from Semper Capital Management in connection with administrative and cease-and-desist proceedings against it. On the basis of the offer, the Commission finds that from July 2013 through May 2014, Semper overvalued certain odd lot positions in securities held by the Semper MBS Total Return Fund (SEMMX), which caused .......
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Risk transfer round-up - 1 May
CRT sector developments and deal news
Deutsche Bank is rumoured to be readying a large corporate capital relief trade for 2Q20. The bank’s last transaction was completed in January. Dubbed CRAFT 2020-1, the US$150m CLN paid Libor plus 9.5% (see SCI’s capital relief trades database).
....... News 1 May 2020
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Targeted action
Wholesale ratings downgrades questioned
The raft of negative rating actions currently hitting the securitisation market is perceived to be driven by the stress created by coronavirus containment efforts. To the extent that some credit ratings were heading for a downgrade before the pandemic, this stress may simply be hastening rating actions. However, there are some who question whether wholesale downgrades are helpful in the .......
News Analysis 1 May 2020
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Landmark guidance
Implicit support guidelines published
The EBA has published landmark implicit support guidelines as part of its post-coronavirus interventions. According to the paper, banks postponing or reducing payments due to payment moratoria wouldn’t automatically be regarded as providing implicit support, since - by definition - such moratoria are not aimed at reducing any actual or potential losses to investors. Nevertheless, banks will still have .......
News Analysis 1 May 2020
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Performance pressures
Irish mortgage loan restructurings anticipated
Deteriorating collateral values and higher defaults are expected to impair the performance of Irish re-performing RMBS, even if cash reserves are adequate to cover liquidity shortfalls related to Covid-19 payment holidays. Indeed, Scope Ratings expects an increase in mortgage defaults to drive another wave of loan restructurings, which will – in turn - increase recovery timings.
The top .......
News 30 April 2020
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Home sales plunge
Over 20% drop in March homes sales bodes ill for MBS
The US March pending home sales report plunged 20.8% compared to February and 16.3% lower than a year ago, the National Association of Realtors (NAR) reported today, showing the calamitous effect of Covid 19 upon the housing market. The Pending Home Sales Index (PHSI) for March is at 88.2, compared to 111.5 in February.
Analysts had predicted a .......
News 30 April 2020
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Manager scrutiny
CLO manager performance on watch
CLO manager scrutiny is growing just as market conditions make their job harder. Nevertheless, differentiation is set to accelerate as investors have to adapt the way they assess management performance.
Jason Merrill, investment specialist at Penn Mutual Asset Management, says: “This pandemic is obviously very unusual and has thrown the market into a downturn. Winners will be those .......
News Analysis 30 April 2020
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Cautiousness prevails
European CLO market update
The European CLO market has had a solid run in to month-end this week, with the first post-Covid crash new deals and secondary activity deepening. However, cautiousness prevails.
While the BWIC market remains patchy and the colour released from it even patchier, though the weaker names generally on offer hasn’t helped, overall secondary activity has been strong this .......
News 30 April 2020
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Unlocking capital
Premod Thomas, ceo of Bayfront Infrastructure Management, answers SCI's questions
Q: Bayfront Infrastructure Management is seeking to help address an infrastructure financing gap in the Asia-Pacific region (SCI 29 April). Can you explain what you mean by this?
The Structured Credit Interview 30 April 2020
A: According to the Asian Development Bank, Asia will need approximately US$1.34trn annually in infrastructure financing between 2016 and 2020 to sustain economic growth. This represents approximately 6% of the region’s .......
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Prudential flexibility reiterated
Sector developments and company hires
Prudential flexibility reiterated
Market Moves 29 April 2020
The European Commission has adopted a package to help facilitate bank lending to households and businesses throughout the European Union that includes an Interpretative Communication on the EU's accounting and prudential frameworks, as well as targeted ‘quick fix’ amendments to the CRR, in order to maximise the ability of banks to lend and absorb losses related to .......
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Growth phase
Asian infrastructure loans eyed
Singapore-based Clifford Capital has established a holding company structure under Clifford Capital Holdings (CCH) to drive its next phase of growth. The firm plans to expand into new business lines, including the securitisation of infrastructure loans through Bayfront Infrastructure Management and the provision of private credit and mezzanine financing solutions through Keppel-Pierfront Private Credit Funds (SCI 1 April).
News 29 April 2020
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PEFF funds allocated
Sector developments and company hires
PEFF funds allocated
Market Moves 28 April 2020
The steering body of the World Bank’s Pandemic Emergency Financing Facility (PEFF) has allocated US$195.84m to 64 of the world’s poorest countries with reported cases of Covid-19 to fund critical lifesaving medical equipment and support for health workers on the frontlines of the crisis. The allocation represents the amount received when the PEFF insurance window triggered for .......