CLOs

  • Undersupply and oversubscription

    Quarterly review and outlook for European ABS

    We asked Lloyds Bank, the winners of SCI's 2011 arranger award for European consumer/credit card ABS, its views on activity in Q4 and expectations for Q1 in the sector. Below are SCI's questions and the responses from Bob Paterson, head of ABS syndicate, Lloyds Bank Wholesale Banking & Markets.

    Over the past quarter, what have been the key trends in .......

    News Analysis 8 February 2013

  • Investment manager adds two

    Highland Capital Management has boosted its structured credit capabilities by hiring Andrea Lloyd as credit trader and Scott Baker as director. Both will be based in the firm's Dallas office.

    Lloyd re-joins Highland from Alpha Titans and has also worked at Accenture and Citi as an analyst. She takes responsibility for trading bank loans and high yield bonds in the .......

    Job Swaps 5 February 2013

  • Bond-for-loan takeouts scrutinised

    Bond-for-loan takeout transactions are accelerating prepayments of better credit quality loans in European CLOs. Moody's notes in its latest Credit Outlook that these accelerated prepayments are credit positive for senior notes in amortising CLOs that will receive early pay-downs, but are credit negative for mezzanine and junior CLO notes that are left exposed to collateral obligors with lower credit quality.

    News Round-up 4 February 2013

  • Euro price gains slowing

    European BWIC volumes for the first month of 2013 stand at €2.4bn, according to Deutsche Bank figures. This level is some 122% higher than for the same period last year, with CLOs (accounting for €600m of the volume) and CMBS (€438m) featuring heavily.

    So far this paper has been readily absorbed by the market, but analysts at the bank note .......

    Market Reports 1 February 2013

  • CLO 2.0 call risk eyed

    With US$8.3bn issuance from 15 US CLOs, January month-to-date has already surpassed last November to be the busiest month for CLO 2.0 volume. Primary triple-A spreads are now 7bp tighter year-to-date at 130bp over Libor and are forecast to reach 100bp over by year-end.

    A number of CLO 2.0 tranches with high coupons have traded close to par in the .......

    News Round-up 29 January 2013

  • FATCA reprieve for CLOs

    The final rules pertaining to the implementation of the Foreign Account Tax Compliance Act (FATCA) provide a carve-out for legacy CLOs. In view of their restricted documentation that makes it difficult to comply, legacy CLOs in existence prior to 31 December 2011 will be exempt from FATCA and deemed compliant until 31 December 2016.

    Proper documentation will be required beyond .......

    News Round-up 29 January 2013

  • Appleby CLO specialist to move on

    Nicola Bashforth is set to join Maples and Calder as counsel in the finance team. She is currently at Appleby and will complete her move in April.

    Bashforth has particular expertise in CLOs and will report to Mark Matthews, parter and head of the firm's CLO team.

    .......

    Job Swaps 28 January 2013

  • Lyxor expands in credit

    Lyxor Asset Management is strengthening its presence in the UK and expanding into managed credit solutions.

    Pierre Gil has been named ceo of Lyxor UK. Based in London, he reports to Lyxor ceo Inès de Dinechin and locally to Ian Fisher in his capacity as UK chief country officer for Societe Generale Group. Gil remains a member of Lyxor's executive .......

    Job Swaps 25 January 2013

  • Cairn CLO takes shape

    Credit Suisse is circulating the preliminary capital structure of Cairn Capital's long-awaited €300.5m European CLO. Cairn CLO III features a €181.5m senior tranche and appears to be relatively low-levered, with the subordinated notes accounting for around 20% of the capital structure. A short three-year reinvestment period should also offer comfort to investors.

    Pramerica is also said to be prepping a .......

    News Round-up 25 January 2013

  • Appleby adds CLO vet

    Appleby has added Ian Gobin to its Cayman practice, further strengthening its global funds and finance teams. He will also reinforce the CLO team, reporting to global head of structured finance Julian Black.

    Gobin joins as partner and was most recently at Walkers, where he spent 11 years and specialised in asset finance, structured finance and secured lending. He trained .......

    Job Swaps 24 January 2013

  • The big picture

    Christopher Long, president at Palmer Square Capital Management, answers SCI's questions

    Q: How and when did Palmer Square Capital Management become involved in the structured finance markets?
    A:     Palmer Square was really set up in 2009 to take advantage of opportunities within credit, allowing us to exploit many opportunities within structured credit. Fountain Capital Management, which we recently acquired a majority interest in (SCI 9 January), has .......

    The Structured Credit Interview 24 January 2013

  • Permacap completes fund raise

    Greenwich Loan Income Fund has placed 11,917,000 new ordinary shares at a price of 50p per share to raise gross proceeds of £6m. Arranged by Panmure Gordon, the placing represents 10% of the company's issued ordinary share capital.

    The net proceeds, together with other capital available for investment, are expected to be used to fund the equity element of future .......

    Job Swaps 23 January 2013

  • Euro SME CLOs on review

    S&P has placed or kept on credit watch negative its ratings on 100 tranches in 33 European SME CLOs, following an update to its criteria that addresses credit quality of the securitised assets and payment structure/cashflow mechanics (SCI 11 January). The move affects approximately 33.6% (by number) of the European SME CLO tranches that the agency currently rates.

    The originator's .......

    News Round-up 18 January 2013

  • Low DMs for Euro CLOs

    The European secondary CLO sector was quick to spring to life at the start of the year, but now appears to have levelled off somewhat. One trader reports that it remains a buyer's market.

    "There was a significant acceleration to begin 2013, with the market certainly coming up. It looks like it has calmed down a little now, but that might .......

    Market Reports 15 January 2013

  • Lack of CLO supply highlighted

    Lack of supply is the top concern for the second consecutive time, according to JPMorgan's 1Q13 global CLO client survey. This is attributed to the outlook of very low to negative net supply across markets.

    Other concerns were fairly equally distributed between lack of arbitrage and collateral stress. Extension risk scored fairly low in the latest survey, however.

    Meanwhile, the .......

    News Round-up 14 January 2013

  • SME CLO methodology updated

    S&P has updated its methodology and assumptions for assessing CLOs backed by European SMEs. The new criteria are expected to have a neutral to negative impact on investment-grade ratings of existing transactions.

    The criteria update addresses credit quality and cashflow mechanics. They apply to CLOs backed by granular and well-diversified pools, but do not apply to concentrated portfolios or portfolios .......

    News Round-up 11 January 2013

  • Mid-market specialist enlisted

    Jeff Knopping has joined KCAP Financial as md in charge of origination. He was previously md in the private capital and special situations groups at William Blair & Company.

    Prior to joining William Blair, Knopping was at GE Capital, where he co-founded the DCM business and led all capital markets activities for GE Commercial Finance. He was also global sponsor .......

    Job Swaps 10 January 2013

  • CIFC snags CLO chief

    John Wu has joined CIFC Corp as md and portfolio manager focusing on structured investments. He has 16 years of financial industry experience and specialises in structured credit and CLOs.

    Wu was previously head of CLO structuring at UBS. He has also held senior roles at China International Capital Corporation, Deutsche Bank and Goldman Sachs.

    .......

    Job Swaps 21 December 2012

  • Update for CLOs with peripheral exposure

    Fitch has updated its criteria assumptions for European CLOs with respect to partial exposure to peripheral eurozone countries where rating caps have been applied. The average exposure to assets in Spain, Ireland, Portugal and Greece across all Fitch-rated CLOs is 10%.

    The agency does not expect any material rating changes as a result of this update, owing to the currently .......

    News Round-up 19 December 2012

  • Asian attraction

    Yield available, although challenges remain

    The structured finance markets in Asia face significant constraining factors in 2013. A preference for covered bonds will limit RMBS issuance on the mainland, while deal volume in Japan and Australia is expected to be flat to lower, with demand continuing to outstrip supply.

    Gregory Park, managing partner at Northstone Peak, notes that the structured finance market in Asia remains .......

    News Analysis 19 December 2012

  • Rally drivers

    US ABS recovery subject to potential shocks

    The US ABS market rallied strongly in 2012, with CLO and CMBS issuance volumes in particular surprising many. A substantial recovery is anticipated in most areas next year, although this remains subject to potential fiscal and regulatory shocks.

    "Across the spectrum of securitised products, 2012 has turned out to be an impressive year for investors, with substantial double-digit returns - .......

    News Analysis 18 December 2012
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