Complete news archive
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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 .......
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Securitisation support
AOFM initiatives to boost volumes
The Australian Office of Financial Management has acted quickly to support the Australian securitisation market amid the coronavirus fallout. Indeed, a boost to both primary and secondary ABS volumes is expected as a result of its A$15bn Structured Finance Support Fund (SFSF) initiative (SCI 30 March) and the proposed Forbearance SPV respectively.
Martin Jacques, director, head of .......
News Analysis 28 April 2020
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Opportunistic buying
Covid-19 kicks off secondary SRT market
Capital relief trade secondary market activity has received a boost from the coronavirus fallout as primary issuance remains largely on hold until the second half of the year. The trend is driven by a variety of factors, including opportunistic buying and portfolio rebalancing (SCI 15 April).
“The secondary SRT market was similar to other fixed income markets. .......
News Analysis 28 April 2020
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European SME ABS struggling
Sector developments and company hires
European SME ABS struggling
Coronavirus-driven disruption is creating financial difficulties for European SMEs that heavily rely on securitisations for funding. Consequently, the crisis and subsequent recession will challenge the asset quality of SME ABS, according to a new report from Moody’s.“There is a widespread lack of financial strength and fewer financing options among SMEs, relative to large corporate .......
Market Moves 27 April 2020
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SCI Start the Week - 27 April
A review of securitisation activity over the past seven days
Last week's stories
News 27 April 2020
Accessing liquidity
The role technology plays in securitising trade finance for profit and success
Bright spot?
European logistics gaining momentum
Extension risk
Willingness and ability to call weighed
Non-agency CMBS goes it alone
The non-agency CMBS market is an orphan of the storm
NPL ABS eyed
Greek banks target HAPS, despite virus crisis
Pressured profitability
Building societies sensitive to lockdown
Rating reaction?
Potential .......
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De-risking deluge?
US CLO managers' initial crash response assessed
The current unprecedented trading conditions will only lead to ever-greater CLO manager differentiation. For now, a new report assesses how managers have initially responded to the market and economic volatility seen so far.
JPMorgan CLO research analysts have analysed 173,420 US loan trades for the year-to-date. This adds to their ongoing study of now 2.39 million CLO manager .......
News 27 April 2020
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Inventory ABS prepped
Sector developments and company hires
Inventory ABS prepped
Market Moves 24 April 2020
Fintech platform Supply@ME Capital (SYME) has entered into an agreement with StormHarbour Securities for the issue, distribution and placing of a series of ABS that are guaranteed against inventories purchased directly by the platform's SPVs (SCI 15 April). Details of the securitisation programme are being finalised, but it is anticipated to cover - within 12 months .......
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NPL ABS eyed
Greek banks target HAPS, despite virus crisis
Greek banks are targeting over €30bn of non-performing loan securitisations in 2020 via the Hercules Asset Protection Scheme (HAPS). However, recent measures to curtail the spread of Covid-19 could render this task more difficult (SCI 9 April).
Among the banks readying NPL ABS deals is Alpha Bank, which intends to frontload the sale of its NPL exposures with a .......
News Analysis 24 April 2020
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Stalwart Canadians
Canadian CMBS better positioned than US
There is some evidence that the Canadian CMBS market is in a better state to ride out the turbulence of the Covid 19 crisis than the US market, suggest analysts.
“Taking the base case scenario (that the recovery will begin at the beginning of 2021) the Canadian CMBS market is better positioned. It’s not just a matter of .......
News 24 April 2020
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Underperformance underlined
Italian NPL ABS ratings hit
Moody’s has downgraded and placed on review for further downgrade the ratings of two notes and placed on review for downgrade the ratings of 12 notes across 11 Italian non-performing loan securitisations. The downgrades reflect underperformance against initial assumptions and the rating reviews reflect the slower and potentially lower anticipated cashflows in the transactions, given the reduced functionality of the .......
News 24 April 2020
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Non-agency CMBS goes it alone
The non-agency CMBS market is an orphan of the storm
While a raft of measures to aid liquidity and forestall insolvency have been introduced by the US authorities to asset-backed markets in recent weeks, the non-agency CMBS sector remains outside the umbrella, leading to fears it faces huge losses.
GSE-backed CMBS are considered eligible as collateral under the terms of TALF 2.0, while in the private label sector .......
News Analysis 24 April 2020
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Recovery boost
Weatherford revolvers fully repay amid negative outlook
A new case study from SCI has revealed that oil and gas firm Weatherford International is referenced in a capital relief trade following the company’s successful emergence from bankruptcy in December 2019. The revolvers that backed the SRT deal have fully recovered after the chapter 11 restructuring, although the factors that led the company into bankruptcy - including low .......
News Analysis 24 April 2020
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Grandfathering for Dutch CLO issuers
Sector developments and company hires
Grandfathering for Dutch CLO issuers
Market Moves 23 April 2020
The Dutch tax authorities have provided written confirmation to CLO issuers domiciled in the Netherlands that their recently revised position on the VAT exemption (SCI 10 March) will not apply with retroactive effect. Further, the VAT exemption will continue to apply to transactions for a grandfathering period until 1 January 2021. Issuers are continuing a .......
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GSE advancing obligations aligned
Sector developments and company hires
GSE advancing obligations aligned
Market Moves 22 April 2020
The US FHFA has aligned Fannie Mae's and Freddie Mac's policies regarding servicer obligations to advance scheduled monthly principal and interest payments for single-family mortgage loans. Once a servicer has advanced four months of missed payments on a loan, it will have no further obligation to advance scheduled payments. When a mortgage loan is in an .......
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Accessing liquidity
Christoph Gugelmann, co-founder of Tradeteq, highlights the...
Access to liquidity is becoming more important than ever; many businesses – both large and small – need support in order to maintain exporting obligations. However, even if the global economy was not currently wrestling with the impact of Covid-19, there would still be a US$1.5trn trade finance gap between what banks can loan versus what businesses need.
Talking Point 22 April 2020
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Extension risk
Willingness and ability to call weighed
The Covid-19 fall-out appears to have impacted both the willingness and the ability of some UK issuers to exercise call options, since the public primary securitisation market has contracted and funding sources - especially for non-bank lenders - have become scarce (SCI 17 March). Nevertheless, TFSME-eligible issuers are more likely to call their outstanding transactions, given their ability .......
News 22 April 2020
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Structural review
New shape of European CLOs examined
CLO issuers are having to adapt to the current market environment and consequently new deals are moving away from traditional structures. A new report from S&P examines the major changes it is seeing in proposed European issuance.
Understandably many deals being proposed are utilising lower leverage and greater protection. “To address the increased downside risks on corporate downgrades, .......
News 22 April 2020
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Pressured profitability
Building societies sensitive to lockdown
UK residential mortgage originations have decreased significantly due to the current social distancing measures. However, the profitability of building societies depends on their ability to grow their loan books, says KBRA.
Valuations are a significant step in the process of originating and underwriting new mortgage loans. However, property visits are not taking place at the moment.
Joanna .......
News 21 April 2020
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Rating reaction?
Potential shift to non-investment grade drives selling
The CLO BWIC calendar has been dominated by triple-B paper so far this week, as sellers look to off-load bonds ahead of potential downgrades into non-investment grade territory. The pattern could continue for some time, with rating-sensitive investors forced to sell, pushing spreads wider.
After Moody’s became the latest rating agency to place large swathes of CLOs .......
News 21 April 2020
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Moody's puts CLOs under review
Sector developments and company hires
Moody’s puts CLOs under review
Moody's has placed on review for downgrade its ratings on 859 tranches issued by 358 US BSL CLOs (plus another 25 linked US CLO combo notes, secured notes and repacks) and 117 tranches issued by 39 European BSL CLOs. The affected securities represent 19% of Moody's US-rated BSL CLOs and 14% of its European-rated CLOs.Market Moves 20 April 2020
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Bright spot?
European logistics gaining momentum
The logistics sector is set to be a bright spot in European commercial real estate post Covid-19. Coronavirus impacts represent one of six fundamental factors behind the sector’s momentum, according to Scope Ratings, alongside growth in e-commerce, end-customer demands, supply chain optimisation, a supply-demand/supply imbalance and new urban developments.
The agency suggests that these factors are strongly supportive .......
News 20 April 2020