Complete news archive

  • Investors eye esoteric additions

    Esoterics provide investors with the most upside within ABS, according a DBRS survey. By contrast, consumer and commercial ABS yields are expected to remain extremely low over the next 12 months.

    Esoteric ABS - including container, timeshare, whole business and franchise loans, structured settlements and solar and renewables securities - was selected by more than half of respondents as the .......

    News Round-up 21 March 2014

  • Small banks may unload CLOs

    Smaller US banks may sell CLOs amid uncertainty about their treatment under the Volcker Rule, says Fitch. The rating agency believes the banks might divest now to limit downside risks, even though the rules have not been finalised.

    There may yet be an exemption made so banks can hold CLOs, while the Barr Bill approved by the US House Financial .......

    News Round-up 21 March 2014

  • CIR changes take effect

    Moody's has implemented the changes to its methodology for assigning counterparty instrument ratings (CIRs) which were proposed in January (SCI 28 January). The agency is changing how it assesses the effect of counterparty linkage on swap CIRs and has published the final version of its methodology online.

    .......

    News Round-up 21 March 2014

  • RFC issued on swaps reporting

    The CFTC has issued a request for public comment on its swap data recordkeeping and reporting requirements, including ways to improve its data collection and quality standards. The Commission says that comments received will inform its ongoing efforts to improve swap transaction data quality and determine whether and how the swap data reporting rules should be enhanced to ensure effective .......

    News Round-up 20 March 2014

  • Euro ABS 'tight and light'

    The European ABS market continues to quietly generate primary issuances and secondary market bid-lists without making too many waves. One trader reports that this steady state is likely to continue until the end of the month.

    "The European ABS market has been pretty quiet for a couple of weeks now. We are seeing deals coming out in the primary market .......

    Market Reports 20 March 2014

  • Rethink for French NCR?

    France's Constitutional Court last week ruled that a proposal to create a national credit registry (NCR) that would capture individual consumer loan indebtedness is unconstitutional (SCI 13 September 2013). Moody's says in its latest Credit Outlook publication that the move is credit negative for French structured finance transactions because the NCR would have been a tool for French lenders to .......

    News Round-up 20 March 2014

  • Counterparty approach tweaked

    Moody's has modified the scope of its methodology for assessing swap counterparties in structured finance cashflow transactions to conform with its approach to rating covered bonds. In addition, the agency has made several minor adjustments and refinements to clarify the approach outlined in the second and third steps of its swap counterparty methodology.

    In particular, Moody's has clarified the meaning .......

    News Round-up 20 March 2014

  • Cat bond ratings affirmed

    S&P has affirmed its ratings on five natural-peril catastrophe bonds issued by four different issuers. The move follows the annual reset of their probability-of-attachment points.

    In each case, S&P says the probability of attachment was reset to a percentage consistent with the transaction documents and the current rating. In addition, the agency reviewed the creditworthiness of each ceding company and .......

    News Round-up 20 March 2014

  • Fed tapering continues

    The New York Fed will next month further reduce its asset purchases to a pace of about US$25bn per month for MBS and US$30bn per month for longer-term Treasury securities. The existing March schedules for purchases at a pace of US$30bn and US$35bn per month respectively remain in effect until that time.

    The Fed will also maintain its existing policies .......

    News Round-up 20 March 2014

  • Trups recovery offers opportunities

    Trups CDO performance has recovered as bank fundamentals have improved. The rebounding sector can provide investors with a recovery play as deals de-lever, although liquidity and disclosure challenges remain.

    Bank failures climbed with the financial crisis and the amount of defaulted bank Trups held by Trups CDOs jumped from below US$100m in 2008 to over US$6bn by 2011. As failed .......

    News 20 March 2014

  • Appraisal value corrected

    Deutsche Bank, as trustee for WFRBS 2011-C3, has acknowledged a mistake in the appraisal value of the US$12.8m Campus Habitat 15 loan that was included in this month's trustee report for the CMBS. The bank has posted a revised report, increasing the appraisal value from an initial US$1.525m to the correct figure of US$15.25m.

    CMBS strategists at Morgan Stanley note .......

    News Round-up 20 March 2014

  • Aussie ABS performance data released

    Moody's has unveiled a new quarterly report that will track the performance of the Australian ABS market. The inaugural report comprises performance data up to 4Q13 and focuses largely on the Australian auto ABS sector, which accounts for more than 90% of the agency's rated universe.

    "In response to investor feedback, the report is Excel-based and covers the delinquency and .......

    News Round-up 20 March 2014

  • Hedge fund assets near all-time high

    Investors allocated more to hedge funds in February than in any other month since eVestment began tracking monthly flow data in October 2008. An estimated US$41bn flowed into hedge funds during the month.

    Performance gains added a further US$45.9bn, bringing February's asset increase to US$86.9bn, an increase of 3.1%. This is the industry's largest asset growth since performance gains drove .......

    News Round-up 20 March 2014

  • RMBS, covered bonds converging

    DBRS has published an overview of how RMBS and covered bonds (CBs) are becoming increasingly alike. In particular, exacerbated refinancing risk embedded in bullet CB structures has led to the development of conditional pass-through (CPT) CBs (SCI 21 October 2013).

    CPT CBs are instruments that, upon a default of the issuer/sponsor, switch to a pass-through repayment structure. The maturity of .......

    News Round-up 20 March 2014

  • Delivering transparency

    While the financial services industry has to date focused on...

    News that the US SEC postponed a vote in early February regarding the adoption of rules revising the disclosure, reporting and offering process for ABS is disappointing, given the regulator's previously-stated determination to enhance transparency across ABS and MBS instruments. Transformation of this opaque asset class has been high on its agenda since Chairman Mary Shapiro noted the SEC's top .......

    Talking Point 20 March 2014

  • Pfandbrief bank originations step up

    Deutsche Pfandbriefbank has announced a 43% increase in its commercial real estate (CRE) loan origination, to €7bn in 2013, a trend that the bank expects will continue in 2014. Moody's notes in its latest Credit Outlook publication that greater availability of CRE loans is credit positive for European CMBS because it decreases default risk at loan maturity and improves recovery .......

    News Round-up 19 March 2014

  • CDO analytics expanded

    Deloitte has rebranded and expanded its CDO Suite software under the name Solvas, with several new modules, solutions and interfaces now available. The service also has two different delivery methods: on-premise installation on clients' servers; and a hosted option in a data centre.

    .......

    News Round-up 19 March 2014

  • Richmond preps rehab programme

    Richmond, California's city council is now developing a distressed housing rehabilitation programme, following opposition to its efforts to use eminent domain (SCI passim). Under the latest plan, Richmond would buy, rehabilitate and then sell blighted homes in partnership with a local non-profit organisation (Richmond Community Foundation) and law firm Orrick, Herrington & Sutcliffe.

    RMBS analysts at Barclays Capital note that the .......

    News Round-up 19 March 2014

  • CLOs expected to withstand EFH default

    Energy Future Holdings is expected to file for Chapter 11 protection by the end of March, having narrowly avoided a default last November. With about US$46bn outstanding in debt, a bankruptcy by the firm would be the largest ever in the S&P/LSTA Leveraged Loan Index.

    Nevertheless, Bank of America Merrill Lynch CLO analysts believe that current junior US CLO OC .......

    News Round-up 19 March 2014

  • Bundling risk highlighted

    Including services in a lease has become more common in contracts underlying term equipment leasing ABS. However, such 'bundled' contracts introduce performance risk into transactions, according to S&P.

    Bundled contracts can cover a variety of equipment types, but they are most common in office equipment leasing - primarily the bundling of copier maintenance services. For lessees, bundled leasing and service .......

    News Round-up 19 March 2014

  • Project finance CDO criteria updated

    S&P has updated its criteria for rating project finance CDOs. Based on a preliminary analysis, the agency expects the application of the criteria to result in downgrades of 13 tranches.

    Though taking into account the characteristics of debt in this sector, the criteria for rating project finance CDOs adopt the same basic methodologies, assumptions and modelling parameters that S&P uses .......

    News Round-up 19 March 2014
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