Positive pick-up

The positive tone across the European securitisation market appears to be continuing this week, following one that saw rare Dutch consumer (Aurorus 2020) and Portuguese auto (Silk Finance No. 5) paper placed. Indeed, two more relatively rare mandates were announced yesterday (20 July) – a new UK prime RMBS master trust and the first post-coronavirus UK CMBS.

One trader notes: “The European securitisation market continues to have a positive tone this week, supported by the EU stimulus deal agreed between member states.”

Bank of America is in the market with Taurus 2020-2 UK, which is expected to price on Thursday. The transaction is backed by a single loan secured by 285 mainly last-mile logistics properties.

IPTs for the senior class of notes are SONIA plus mid/high-100s. IPTs for the class B to C notes are SONIA plus low/mid-200s, low 300s and low 400s respectively.  

Meanwhile, Coventry Building Society is behind the new master trust. Dubbed Economic Master Issuer, the funded balance of the trust currently stands at £1.15bn, representing 7,341 borrowers.

The Series 2020-1 issuance is STS compliant and comprises two senior sterling-denominated controlled amortisation notes, one of which is set to be publicly distributed and the other retained. Pricing is expected on Friday.

None of the loans are subject to a payment holiday. However, for borrowers that subsequently receive one, Coventry will fund the corresponding share of the deferred P&I. The seller’s share is also available to cover any deferred cashflow.

The trader says: “Coventry has been active in the RMBS market for a while, but has mostly issued standalone deals, so its latest transaction is slightly different in that it is a master trust. For some issuers, the cost of setting up a master trust has historically been too high or they have been put off by the need to maintain the level of collateral in the vehicle.”

He adds: “On the other hand, master trusts enable debt to be issued at a lower rate, so they can be more advantageous over the long run. Plus, it’s easier to tap the US market because dollar buyers prefer bullet cashflows.”

Jasleen Mann

Positive pick-up

Positive pick-up

Category: ABS CMBS RMBS

Tuesday 21 July 2020 15:24 London/ 10.24 New York/ 23.24 Tokyo

European ABS market update

The positive tone across the European securitisation market appears to be continuing this week, following one that saw rare Dutch consumer (Aurorus 2020) and Portuguese auto (Silk Finance No. 5) paper placed. Indeed, two more relatively rare mandates were announced yesterday (20 July) – a new UK prime RMBS master trust and the first post-coronavirus UK CMBS.

One trader notes: “The European securitisation market continues to have a positive tone this week, supported by the EU stimulus deal agreed between member states.”

Bank of America is in the market with Taurus 2020-2 UK, which is expected to price on Thursday. The transaction is backed by a single loan secured by 285 mainly last-mile logistics properties.

IPTs for the senior class of notes are SONIA plus mid/high-100s. IPTs for the class B to C notes are SONIA plus low/mid-200s, low 300s and low 400s respectively.  

Meanwhile, Coventry Building Society is behind the new master trust. Dubbed Economic Master Issuer, the funded balance of the trust currently stands at £1.15bn, representing 7,341 borrowers.

The Series 2020-1 issuance is STS compliant and comprises two senior sterling-denominated controlled amortisation notes, one of which is set to be publicly distributed and the other retained. Pricing is expected on Friday.

None of the loans are subject to a payment holiday. However, for borrowers that subsequently receive one, Coventry will fund the corresponding share of the deferred P&I. The seller’s share is also available to cover any deferred cashflow.

The trader says: “Coventry has been active in the RMBS market for a while, but has mostly issued standalone deals, so its latest transaction is slightly different in that it is a master trust. For some issuers, the cost of setting up a master trust has historically been too high or they have been put off by the need to maintain the level of collateral in the vehicle.”

He adds: “On the other hand, master trusts enable debt to be issued at a lower rate, so they can be more advantageous over the long run. Plus, it’s easier to tap the US market because dollar buyers prefer bullet cashflows.”

Jasleen Mann

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