Complete news archive
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Some softening
European ABS/MBS market update
With the end of the year in sight, issuers are competing for investor demand in the European ABS/MBS primary market. This week saw mixed results for the various actors involved.
“Naturally the market is more complex than a few weeks ago,” notes one European ABS/MBS trader. “2021 has generally been an excellent year for the primary market, which .......
News 12 November 2021
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Risk mitigation
Euro CLO wraps gaining traction
Assured Guaranty (Europe) SA this week closed a financial guarantee for a further European CLO, following the wraps it recently provided for the North Westerly V CLO and Tymon Park CLO deals (SCI 6 September). Financial guarantees are proving attractive to investors seeking to reduce regulatory capital consumption, both on existing exposures and new investments.
The latest .......
News Analysis 12 November 2021
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Sri Lanka eyes remittance securitisation
Sector developments and company hires
Sri Lanka eyes remittance securitisation
The government of Sri Lanka (GOSL) is requesting competitive proposals from banks and investors for consideration to be appointed as counterparts or arrangers for its proposed securitised financing arrangement (SFA). The arrangement would be backed by foreign currency receipts of the Central Bank of Sri Lanka (CBSL) under the mandatory sale of 10% of workers' .......
Market Moves 12 November 2021
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Hedges eyed
CPMs target post-pandemic concentration risks
The International Association of Credit Portfolio Managers (IACPM) has completed its 2021 Principles and Practices in CPM Survey. Conducted every other year, the survey focuses on five key areas of concern to its members, including the evolution of risk and credit portfolio management. The latest survey shows that CPM functions are increasingly concerned about concentration risks, following last year’s .......
News 12 November 2021
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Indian securitisation market presents challenges
The Indian structured finance market has been around for ove...
The market revolves around Indian banks' targets for lending to priority sectors. Banks have traditionally been the largest investors in securitised debt, as they need to fulfil the Indian central bank’s requirements to lend a target percentage of their loan books to priority sectors, which are defined by the central bank and include minorities, agriculture, SMEs and export industries. The .......
Talking Point 11 November 2021
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Too slow
Disappointing timeline for call for evidence on STS reform
The European Commission’s latest call for evidence on its securitisation prudential framework review highlights a familiar pattern in the EU’s regulatory actions. The combination of an elongated timeline and the absence of a holistic approach point to a lack of momentum for the European securitisation market.
Earlier this year (SCI 17 May), the Joint Committee of the European Supervisory .......
News 11 November 2021
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A new chapter for GSE CRT - SCI webinar
Inflation, capital rules, lower origination and regulatory change all loom large
As US inflation hits a 30-year high, the GSE CRT market has a headwind to contend with it hasn’t seen for a long time.
October CPI, reported yesterday, increased by 6.2% from 12 months ago, which represented the fastest annual pace of growth seen since 1990 and was the fifth straight month above 5%.
It’s all change in the CAS and STACR markets .......
News 10 November 2021
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First LBR PCC investor signed
Sector developments and company hires
First LBR PCC investor signed
Lloyds has announced that Ontario Teachers’ Pension Plan Board will be the first investor to support underwriting through its multi-insurance SPV, London Bridge Risk (LBR) PCC. LBR was established in January of this year with sponsorship from Lloyds, with ambitions to create a market that invites new forms of capital and allow for easier access .......
Market Moves 10 November 2021
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Market movers
Leading agency MBS buyer talks taper, inflation and origination
While the encroach of inflationary pressures and the Fed taper will be important factors to consider, the dominant fundamental influence upon MBS in the medium term will be supply, says Brendan Doucette, portfolio manager for GW&K.
Doucette manages an agency MBS portfolio valued at $1.5bn at the end of Q3 2021, up from $1.2bn at yearend 2020. GW&K has over $48bn assets .......
The Structured Credit Interview 9 November 2021
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Multi-currency CLO closed
Sector developments and company hires
Multi-currency CLO closed
Barclays has closed a multi-currency managed cashflow balance sheet CLO. Dubbed Duke Global Funding, the £4bn-equivalent transaction is backed by 519 senior secured and senior unsecured loans extended predominantly to large corporate obligors in Western Europe and the US. The underlying loans are denominated in US dollars, sterling and euro.In terms of geographical diversification, the initial portfolio .......
Market Moves 9 November 2021
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Hurdles ahead?
Dutch RMBS market continues to face challenges
The Dutch prime RMBS market received a boost last week with the announcement of Lloyds Bank’s STS-compliant Candide Financing 2021-1, after the issuer’s almost 10-year absence from the market (SCI 3 November). However, while the prime sector remains in the doldrums, the buy-to-let sector is also facing new regulatory challenges.
“Banks have been historically the main users of securitisation, .......
News Analysis 9 November 2021
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Evolving landscape
Consolidation, fintech driving banking evolution in Ireland and the UK
Consolidation among lenders and the proliferation of fintechs is driving change in the Irish and UK banking sectors. This Premium Content article investigates the impact on the jurisdictions’ RMBS markets.
The banking landscape in Ireland and the UK continues to evolve. Along with consolidation among lenders, the growing market share of fintech platforms is supporting dramatic changes in financial ......
News Analysis 9 November 2021
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Back to back STACR
Second STACR in just over a week hits the tape
Freddie Mac today priced its second STACR in a little over a week, designated STACR 2021-DNA7. The $1.27bn trade is expected to settle on November 12, says the borrower.
The joint lead managers are Wells Fargo and Citi, while co-managers are Barclays, CS, JP Morgan, and StoneX.
This is the GSE’s final DNA transaction of 2021, while an addition HQA deal will be .......
News 8 November 2021
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Irish rebound
Second NPL securitisation marketing
Another Irish non-performing loan securitisation has hit the market less than a month after the Rathlin Residential 2021-1 RMBS priced (see SCI’s Euro ABS/MBS Deal Tracker). The move is in line with the expected growth and post-Covid recovery of the market in the second half of 2021 (SCI 23 July).
Dubbed Portman Square 2021-NPL1, the latest .......
News 8 November 2021
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US CLO equity outperforms
Sector developments and company hires
US CLO equity outperforms
US CLO Equity cashflows average 15.2% across 1,038 BSL transactions that have had four payment dates in 2021, according to a report from JPMorgan CLO research analysts. This is the highest since 2016, which averaged 19.6%.CLOs that were reset in 2021 fared best with a 22% average return driven in part by a small minority that .......
Market Moves 8 November 2021
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SCI Start the Week - 8 November
A review of SCI's latest content
Last week's news and analysis
News 8 November 2021
Back from the brink
Lloyds resurrects UK SME SRTs
Dual-currency deal
Pan-European CMBS prepped
Electric avenue
Adoption of electric cars spells greater volatility for rental car ABS
Freddie and Fannie prosper
Net income/ revenue increased YoY and innovation unveiled in 3Q results
Freddie's eight
Two STACRs to go before yearend after eventful Q3
Holding firm
European ABS/MBS market update
Matryoshka doll?
Use of .......
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Fed set to reduce asset purchases
Sector developments and company hires
Fed set to reduce asset purchases
The New York Fed’s FOMC has increased the System Open Market Account (SOMA) holdings of Treasury securities by at least US$70bn per month and of agency MBS by at least US$35bn per month during the monthly purchase period beginning in mid-November. Additionally, SOMA holdings of Treasury securities will increase by at least US$60bn per .......
Market Moves 5 November 2021
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Electric avenue
Adoption of electric cars spells greater volatility for rental car ABS
If collateral underpinning rental car ABS is increasingly composed of electric cars then the market will be exposed to greater volatility and uncertainty, say credit analysts.
Last week’s purchase of 100,000 new Teslas by Hertz fired the starting gun on the likely increasing adoption of electronic vehicles (EVs) by rental car companies, which will be financed by securitization.
Regulatory pressure and financial incentives .......
News Analysis 4 November 2021
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New originations
Reverse mortgage securitisations re-emerging?
The second post-financial crisis publicly-rated UK securitisation of equity release mortgages (ERMs) and the first to comprise recent-vintage originations has priced. The issuance of two deals this year alone suggests the asset class is re-emerging, driven by lender competition and the improving longevity of the population.
The latest transaction – dubbed ERM Funding Series 2021-1 - follows Towd Point Mortgage .......
News Analysis 4 November 2021
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Servicers facing 'unprecedented' turnover
Sector developments and company hires
Servicers facing ‘unprecedented’ turnover
US commercial mortgage servicers are facing unprecedented turnover levels and filling open positions in the tight labour market may ultimately increase the cost of servicing loans, Fitch suggests. However, the agency notes that to date, there have not been any noted declines in servicing proficiency among Fitch-rated primary, master and special servicers.
Fitch reports lower-than-average employee .......
Market Moves 4 November 2021