Complete news archive
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Legacy repayment rate to remain low
Moody's expects the performance of loans backing European CMBS to stabilise over the next three years. CRE lending will likely remain constrained, however.
"In line with our previous expectations, the outlook for commercial real estate markets has rebounded somewhat after the recent period of financial stress and the euro-area crisis," says Oliver Moldenhauer, a vp-senior analyst in Moody's structured finance .......
News Round-up 3 March 2014
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Fee 'blind spots' examined
Weak EMEA CMBS transaction documentation governing work-out costs and liquidation fees can lead to note shortfalls, even where no securitised loans suffer a loss, Fitch notes. The agency says that, in some cases, misalignment of loan- and issuer-level documentation can leave blind spots regarding the bearer of fees.
Charging the borrower for work-out costs ensures that equity fully bears the .......
News Round-up 3 March 2014
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Challenger bank continues growth
Aldermore Bank has expanded further by appointing Lee Rhodes to lead structured finance and block discounting activities for its asset finance team. He was most recently at Investec and has also worked for ING Lease and Kleinwort Benson.
Rhodes will be based in London. His appointment follows that of Carey Hansford (SCI 21 February) and he joins alongside Sean Jones .......
Job Swaps 3 March 2014
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Chinese CMBS prepped
Dynasty Property Investment is prepping its second cross-border CMBS. Dubbed China Real Estate Asset Mortgages, the US$290m transaction is backed by nine retail properties in nine cities across China.
The deal comprises US$232m class A notes (provisionally rated Aa3 by Moody's) and US$58m class Bs (A3), as well as an unrated CNH440m class C loan. The rating assigned to the .......
News Round-up 3 March 2014
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Swap error corrected
Moody's has downgraded the ratings of five Granite Master Issuer Series 2006-3 tranches, following a correction to an input to the rating tool the agency used. The agency had either affirmed or upgraded the securities on 18 February.
The affected tranches are the class A3, A4, A7, B2 and M2 notes. Due to an error, Moody's did not identify all .......
News Round-up 3 March 2014
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SCI Start the Week - 3 March
A look at the major activity in structured finance over the past seven days
Pipeline
There was no slowing down in activity last week as another 13 deals joined the pipeline. They consisted of four ABS, two CMBS, six RMBS and a CLO.The newly-announced ABS were: US$201m ACER 2014-1; US$500m Chesapeake Funding 2014-1; US$104.4m HERO Funding Series 2014-1; and US$640m PHEAA Student Loan Trust 2014-1. The CMBS were US$290m China Real Estate .......
News 3 March 2014
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Delinquencies down on CWCAM sales
The Trepp US CMBS delinquency rate decreased by 47bp to 6.78% in February, marking the ninth straight month of improvement. The rate is 264bp lower than it was a year ago and 356bp lower than the all-time peak during the summer of 2012.
The decrease is attributed to the jump in loan resolutions, driven by the CWCapital distressed asset sales. .......
News Round-up 3 March 2014
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Arranger league tables - 2013
1 January to 31 December
Arranger league tables 28 February 2014
Korean credit card quality to deteriorate
The credit quality of receivables backing Korean credit card ABS is expected to deteriorate as a result of the recent data breach that affected millions of cardholders. The disappearance of affected cardholders from securitisation pools will weaken the overall credit quality of receivables and the principal payment rate (PPR) in credit card ABS, Moody's says.
Three credit card companies were .......
News Round-up 28 February 2014
Lifting of Aussie import tariffs 'credit negative'
Australia's Productivity Commission published a position paper on 31 January, describing the country's auto import restrictions and tariffs as redundant. Moody's says in its latest 'Structured Thinking: Asia Pacific' publication that the lifting of the restrictions would be credit negative for Australian auto loan and operating lease ABS because they would lower the price of cars, thereby affecting ABS pools .......
News Round-up 28 February 2014
Diamond CDS hit by earnings concerns
Credit default swaps on Diamond Offshore Drilling have widened by 47% over the past month, according to Fitch Solutions. Diamond's CDS significantly underperformed the 3.4% tightening seen for the broader North America oil and gas sector over the same period. The cost of credit protection on the firm's debt has also been climbing steadily since late-January.
After trading consistently at .......
News Round-up 28 February 2014
Further PLS settlement reached
The FHFA has reached a settlement with Societe Generale and related companies for US$122m. The settlement resolves claims alleging violations of federal and state securities laws in connection with private-label mortgage-backed securities (PLS) purchased by Fannie Mae and Freddie Mac in 2006.
Under the settlement, Societe Generale will pay roughly half of the settlement monies to Fannie Mae and half .......
Job Swaps 28 February 2014
SFR operational risk highlighted
S&P says it is yet to see a single-family rental (SFR) securitisation with the level of credit enhancement and other risk-mitigating features that warrant the highest investment grade rating. The agency's primary reservations regarding the sector revolve around the industry's operational infancy, historical performance, the current business model's ability to withstand extreme economic conditions and the ultimate liquidation values of .......
News Round-up 28 February 2014
CLO equity continues excelling
US CLO equity is one of the few remaining fixed income products offering high carry. The segment posted an average cashflow return of 25% last year across 463 deals.
Based on a cashflow study and prices of US equity tranches, JPMorgan CLO analysts note that average total return last year was 8.2% for US 1.0 equity and 16.1% for 2.0 .......
News 28 February 2014
CLO tail risk approach unveiled
Moody's has updated its approach to assessing tail-end risk in CLOs that hold long-dated assets. The update - which the agency proposed in a request for comment on 11 December 2013 - will not affect any current CLO ratings.
Under the new approach, Moody's will consider in its analysis capping ratings at certain time horizons before the maturity of a .......
News Round-up 28 February 2014
Subprime settlement in the works
Morgan Stanley has disclosed in a regulatory filing that it has reached an agreement in principle with the US SEC to resolve "an investigation related to certain subprime RMBS transactions sponsored and underwritten by the company in 2007". Pursuant to the agreement in principle, the bank would be charged with violating Sections 17(a)(2) and 17(a)(3) of the Securities Act, according .......
Job Swaps 28 February 2014
Liquidation volume doubles
US CMBS liquidation volume doubled in February, due in large part to many of CWCapital's REO asset sales flowing through remittance reports. Liquidation volume ended this month at US$2.65bn, more than double January's volume and the 12-month moving average of US$1.33bn, according to Trepp.
February loss severity came in at 45.59%, down from January's 58.51% and on par with the .......
News Round-up 28 February 2014
PRI to boost EM issuance
Political risk insurance (PRI) for capital markets has re-emerged, with a broader scope for coverage to adapt to the changing needs of emerging markets finance, Fitch says. These newer products normally relate to a sovereign guarantee or obligation and therefore do not address private sector companies in the absence of a sovereign support mechanism.
"New PRI products that cover not .......
News Round-up 27 February 2014
Novel BWIC for Euro CLOs
Yesterday proved to be a busy session for the European CLO secondary market. Amidst the strong supply was what is believed to be the first CLO 2.0 single-B BWIC.
That 2.0 original single-B list included tranches from Dryden 29 Euro CLO 2013, Richmond Park CLO and St Paul's CLO III, all of which were issued towards the end of last .......
Market Reports 27 February 2014
Increased investor, IO loans 'credit negative'
The increase in the proportion of investor and interest-only (IO) loans in new mortgage originations is credit negative for new Australian RMBS transactions, according to Moody's in its latest 'Structured Thinking: Asia Pacific' publication. As of 30 September 2013, the proportion of investor loans increased to 34.3% from 26.4% in March 2009, while the proportion of IO loans increased to .......
News Round-up 27 February 2014
CLO modelling tool enhanced
Codean has released Codean CLO Analytics version 4.0, which includes the firm's structuring and rating analyser module SaRA. The service aims to provide investment banks, asset managers and others arranging new CLO transactions with the analytical tools to do so.
SaRA is a deal modelling tool with over 700 existing CLO deal models as templates to start from. This is .......
News Round-up 27 February 2014