Complete news archive
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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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Mezz concessions
US CMBS market update
US CMBS new issues appear to be struggling, following market volatility at the beginning of the week.
One trader says: “It seems like the new issue pipeline is struggling to get off the ground and many dealers are having to give concessions in the mezz area in order to get deals done.”
Meanwhile, in the secondary market, .......
Market Reports 28 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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Green wave
International RMBS market update
A pair of RMBS bid-lists comprising mostly senior non-conforming and prime collateral are set to hit the market tomorrow at 2pm GMT. One list consists of 16 euro-denominated line items, while the other has 15 sterling bonds, including a chunky £34.25m slice of the WARW 2 A tranche.
“The question is where the appetite is going to come .......
Market Reports 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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Two-sided market
European secondary market update
There are a few CLO BWICs out for the bid today with another RMBS scheduled for this evening. The European market has not followed an identifiable trend since the US thanksgiving holiday and activity remains subdued.
“A number of accounts are waiting on the sidelines and only going for highly discounted paper,” says one trader. “It could be the calm before ......
Market Reports 26 November 2018Premium Content
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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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Early warning?
Cov-lite Euro CMBS gaining traction
The influences of the leveraged loan market and non-traditional CMBS investors, along with the competitive pressure that lenders are under, is spurring the emergence of covenant-light loans in European CMBS. However, given the length of CRE loan terms, it will be another couple of years before the performance of cov-lite CMBS can be assessed versus regular CMBS.
Cov-lite .......
News 22 November 2018
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Softening activity
European CLO market update
The European CLO market is relatively quiet due to the Thanksgiving holiday in the US, but the pipeline is seeing plenty of supply.
“The market is responding to the amount of supply,” says a trader. “Everything is wider; new issues are also coming in wide. I guess to a small extent the seize-up in equities has affected the market and .......
Market Reports 22 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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Hesitant appetite
US CLO market update
US CLO equity and double-B bonds were casualties of the drop in the S&P 500 index yesterday, with bids softening across the secondary market.
“A handful of CLO equity and double-B bonds were out for the bid yesterday and did not trade,” says a trader. “There was some clear hesitation in the market compared with a week ago. .......
Market Reports 21 November 2018